Stock price - do people realize Rivian (RIVN) is NOT Tesla (TSLA)??

[kizamybute']

This thread is too funny. I'm invested in TSLA and on those forums, they also dump on Elon since the stock price is declining. And I come here, and you guys are doing the same.

The reality is a bit more nuanced.

In the 2007-2009 recession, US auto sales declined something like 33%. That is a HUGE decline. I personally don't think 2023 is going to be like that, but there is a non-zero chance it will be, and if there one thing I know the stock market reacts to is FEAR. On both the downside and upside (Fear Of Missing Out, FOMO).

So ALL auto manufacturers are getting it in the nuts right now due to severe recession fears. If anything, Rivian, Ford, GM should be declining more than Tesla, but that hasn't been the case I think. Tesla is actually getting hammered just as much if not more (and that probably IS due to Elon being Elon).

Why should Tesla's decline be less? Because they have a huge order backlog, zero debt, and huge positive gross margins. Tesla is the only auto company with all three of these. It will allow Tesla to drop prices next year if auto sales do indeed drop 33% to maintain volumes. Won't do their profit much good, but it'll destroy the competition.

Rivian won't be able to drop prices since it doesn't have huge positive gross margins. But at least Rivian has a huge order backlog so they may weather the storm.

Traditional auto could drop prices to some degree (their margins aren't quite as good as Tesla, but they are good enough), but they have a large amount of debt and rising interest rates are hurting them. They also don't have a huge order backlog.

Now, if a bad recession doesn't come to pass, then stock prices will rebound quite nicely, but that isn't where the market's head is at right now.

Bottom line, don't sell, but also don't buy until recession fears recede.

You make sense. I wasn't blaming Elon per se', more just that Tesla is the EV market leader and appears to be setting the trend. When it goes up or down, the other's seem to go with it on a pretty consistent basis. Most investors probably don't even have a clue what Rivian is. Likely a stock broker controls their holdings and those appear to lump all EV's into one group.

And yes, with rising interest rates and people's fears, purchasing high-end cars has dropped down their list of "to do" things. All these companies have been jacking up prices, yes, partially because costs have increased, but also because the consumers were paying these ridiculous prices. When I bought my last Tesla just 3 years ago, they were begging me to buy it. Loaded Model S for $79,000 with AP and free supercharging. Now, the same general model is $130,000+. Even Ford went from $39,000 to $56,000 on the lightning in less than 1 year. We're headed back to the days, hopefully, where things become more normal. Hopefully, where you can order a car and get it in a few months, rather than waiting for 3 years! Dealer mark-offs rather than mark-ups. Tesla is currently reducing prices in a desperate attempt to meet delivery goals this year. Rivian trucks that were selling at $125,000 4-5 months ago are now selling at $85,000 to $90,000.

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[Tahoe Man]

You make sense. I wasn't blaming Elon per se', more just that Tesla is the EV market leader and appears to be setting the trend. When it goes up or down, the other's seem to go with it on a pretty consistent basis. Most investors probably don't even have a clue what Rivian is. Likely a stock broker controls their holdings and those appear to lump all EV's into one group.

And yes, with rising interest rates and people's fears, purchasing high-end cars has dropped down their list of "to do" things. All these companies have been jacking up prices, yes, partially because costs have increased, but also because the consumers were paying these ridiculous prices. When I bought my last Tesla just 3 years ago, they were begging me to buy it. Loaded Model S for $79,000 with AP and free supercharging. Now, the same general model is $130,000+. Even Ford went from $39,000 to $56,000 on the lightning in less than 1 year. We're headed back to the days, hopefully, where things become more normal. Hopefully, where you can order a car and get it in a few months, rather than waiting for 3 years! Dealer mark-offs rather than mark-ups. Tesla is currently reducing prices in a desperate attempt to meet delivery goals this year. Rivian trucks that were selling at $125,000 4-5 months ago are now selling at $85,000 to $90,000.

People had a lot of excess savings, a lot of that generated from equity returns. I mentioned a long while ago, that many purchasing EV's at escalating prices didn't care because it was being purchased from equity gains. The wealth effect is real.

This seems like a repeat of the dot com bubble 20 something years ago.

 

[kizamybute']

People had a lot of excess savings, a lot of that generated from equity returns. I mentioned a long while ago, that many purchasing EV's at escalating prices didn't care because it was being purchased from equity gains. The wealth effect is real.

This seems like a repeat of the dot com bubble 20 something years ago.

Yes. Real Estate is the same way. People went nuts over the past two years with pricing for real estate. As with 2006/2007, the more they skyrocket in a short period of time, the harder they fall. People had some buying power, for cars and real estate due to interest rates being so low. Now, the affordability has declined drastically over the past several months. Foreclosures will be common place in the not too distant future.

In the past, there were at least several periods where Real Estate was the better investment, then when it wasn't, stocks were a good investment and vice-versa. With the government choosing to do nothing for years, then correct it all at once (over a short period of time), they're pretty much wiping everything out at once. As I noted earlier, a 1% per year increase, people could have adjusted to. Going from 2% to 7% in a year (and plans to go even higher next year), what do they expect to happen? Apparently everyone but the government saw inflation getting out of hand a couple of years ago.

And it is too bad for those that really wanted to invest into Rivian as a company. I think they're doing an admirable job for the first year of producing and delivering vehicles. Tesla has always been WAY over-priced in terms of stock price versus what the company value should be. Now, that's correcting itself and all the other EV's are suffering from it. Rivian took advantage of it too with the IPO, then investors went nuts to drive it over $200. Feel bad for those that purchased it then. Likely won't see those figures ever again. Rivian will have to really do something special, even beyond what Tesla has done, to warrant that type of pricing again, at least in the next decade or two.

 

[SANZC02]

Yes. Real Estate is the same way. People went nuts over the past two years with pricing for real estate. As with 2006/2007, the more they skyrocket in a short period of time, the harder they fall. People had some buying power, for cars and real estate due to interest rates being so low. Now, the affordability has declined drastically over the past several months. Foreclosures will be common place in the not too distant future.

In the past, there were at least several periods where Real Estate was the better investment, then when it wasn't, stocks were a good investment and vice-versa. With the government choosing to do nothing for years, then correct it all at once (over a short period of time), they're pretty much wiping everything out at once. As I noted earlier, a 1% per year increase, people could have adjusted to. Going from 2% to 7% in a year (and plans to go even higher next year), what do they expect to happen? Apparently everyone but the government saw inflation getting out of hand a couple of years ago.

And it is too bad for those that really wanted to invest into Rivian as a company. I think they're doing an admirable job for the first year of producing and delivering vehicles. Tesla has always been WAY over-priced in terms of stock price versus what the company value should be. Now, that's correcting itself and all the other EV's are suffering from it. Rivian took advantage of it too with the IPO, then investors went nuts to drive it over $200. Feel bad for those that purchased it then. Likely won't see those figures ever again. Rivian will have to really do something special, even beyond what Tesla has done, to warrant that type of pricing again, at least in the next decade or two.

I'm with you here, I think they could have done 1-2% a year and let it come back slower. Timing their action to unemployment numbers when there is 1.7 jobs for everyone unemployed was tough as well.

Always a problem when taking 6 or 7 years to dig the hole and try to get out of it in 1.

 

[kizamybute']

I'm with you here, I think they could have done 1-2% a year and let it come back slower. Timing their action to unemployment numbers when there is 1.7 jobs for everyone unemployed was tough as well.

Always a problem when taking 6 or 7 years to dig the hole and try to get out of it in 1.

And sadly, it's going to be tough to improve unemployment. Covid taught the world that Amazon exists. Brick and mortar stores are becoming relics. Other companies are taking jobs away to go automated.

Tried to get out of a parking lot in L.A. last week and there were no attendants. The machine was not working. Had to get everyone to back up so I could move to the the other exit. Just ridiculous. But, the company sees it as saving a salary. Tesla themselves have virtually nobody available to TALK to. Rivian still does, but that will change over time.

On the other aspect, I still desperately want to do my part and support brick and mortar stores, but, they make it really tough to do so. I needed a faucet for my bathroom. Home Depot had it for $167 and had to order it. Amazon had the same one for $37 and had it the next day. Even today, tried to go find a Nema 14-50 adapter at 3 different stores. Nobody had one in stock. Went on Amazon and there were a gazillion choices for $30 or less. Took two minutes rather than a couple of hours driving around from store to store.

Now with companies like Tesla, Rivian, FedEx, etc, trying to build driverless taxies and delivery vehicles, that will put more humans out of work for automation. I do miss the 80's and 90's, where people had to communicate with each other verbally and humans were still a necessity. Now, the kids judge how popular they are based on how many "friends" they have on Facebook!

 

[Tahoe Man]

Yes. Real Estate is the same way. People went nuts over the past two years with pricing for real estate. As with 2006/2007, the more they skyrocket in a short period of time, the harder they fall. People had some buying power, for cars and real estate due to interest rates being so low. Now, the affordability has declined drastically over the past several months. Foreclosures will be common place in the not too distant future.

In the past, there were at least several periods where Real Estate was the better investment, then when it wasn't, stocks were a good investment and vice-versa. With the government choosing to do nothing for years, then correct it all at once (over a short period of time), they're pretty much wiping everything out at once. As I noted earlier, a 1% per year increase, people could have adjusted to. Going from 2% to 7% in a year (and plans to go even higher next year), what do they expect to happen? Apparently everyone but the government saw inflation getting out of hand a couple of years ago.

And it is too bad for those that really wanted to invest into Rivian as a company. I think they're doing an admirable job for the first year of producing and delivering vehicles. Tesla has always been WAY over-priced in terms of stock price versus what the company value should be. Now, that's correcting itself and all the other EV's are suffering from it. Rivian took advantage of it too with the IPO, then investors went nuts to drive it over $200. Feel bad for those that purchased it then. Likely won't see those figures ever again. Rivian will have to really do something special, even beyond what Tesla has done, to warrant that type of pricing again, at least in the next decade or two.

I think the writing is on the wall that Rivian is skating on thin ice.

Throwing money into newly issued public company is always dicey, unless perhaps it's a spin off from a established company.

I'm not sure if tightening via baby steps helps or not. Greenspan did that before 2008 and everything still blew up. Usually the federal reserve is okay with financial bubbles as long as they can mop them up. Greenspan stated that a while back.

Growth companies depend on easy money, low rates, booming economy, etc. Once the brakes are on, that comes to a halt, that's why their equity takes a tumble. Bear markets can be absolutely brutal. Both bear and bull markets churn from different sectors.

The stock closed above yesterdays low, IMO that suggest the selling is becoming exhausted.

 

[Zoidz]

Can you point to where you got this information? I’ve been looking for it for months and cannot find a breakdown between the R1S and R1T preorders anywhere.

I recall seeing information somewhere ? that there are more S orders than T as the S appeals to more people. I’ll have to look for that.

 

[jakef801]

I'm hyper long on RIVN. Let's see what happens when (maybe if) they actually start production at their Georgia plant in 2024ish.

 

[kurtlikevonnegut]

Have 200 shares of RIVN in my Roth - think avg price is 28. And 30 shares in my brokerage at 37 ...

Might nibble more in my roth... at $18?

Bought more in my Roth as well at $19.80. Bringing my cost basis down more.

RIVN is getting punished short term for being a company with negative gross margins, but there is a very good chance that the economic headwinds that they are being punished for will be alleviated long before Rivian is in a position where they need to take on more debt. Unless they lose a huge number of preorders (over 50%) and/or their relationship with Amazon collapses, they will be able to weather the storm in the short term. I don't expect their stock to get back to IPO levels next year, or maybe the year after, but that doesn't really matter to me or Rivian at the moment.

 

[kizamybute']

Bought more in my Roth as well at $19.80. Bringing my cost basis down more.

RIVN is getting punished short term for being a company with negative gross margins, but there is a very good chance that the economic headwinds that they are being punished for will be alleviated long before Rivian is in a position where they need to take on more debt. Unless they lose a huge number of preorders (over 50%) and/or their relationship with Amazon collapses, they will be able to weather the storm in the short term. I don't expect their stock to get back to IPO levels next year, or maybe the year after, but that doesn't really matter to me or Rivian at the moment.

I'd like to say I have full confidence that Amazon is behind them, but after seeing them lose Ford, then Mercedes, makes me wonder why? I don't think we have the true reasoning behind either divorce. Also, thinking further back, am reminded that Amazon contracted another EV maker to build electric delivery vans. That makes me wonder how secure that partnership is as well? With so much invested in Rivian, why would you support a competing company? Seems a bit odd. I don't know the reasons, but with losing Ford and Mercedes, possibly these big companies are not agreeing with Rivian's general thinking? No assumptions, just questions that arise. If they were to lose Amazon, that could be the final straw. Am happy to see several delivery vans having been built and delivered, so hopefully that's a sign that the relationship is strong. Now just need them to figure out how to produce more of these things and get them delivered, while also thinking ahead to the their next projects as there's only so big of a market for $90,000+ trucks and SUV's. Lucid is proof that, just beating Tesla at its own game is not enough. Lucid pricing is so high that it has limited appeal in terms of the overall market place.

 

[theyoungone]

I'm hyper long on RIVN. Let's see what happens when (maybe if) they actually start production at their Georgia plant in 2024ish.

If they can get Georgia up and running and the R2 units off the line, they will succeed. The dual motor variant of the R1S will sell like hotcakes. Especially with the standard pack once they start producing it since it’s under 80K and may qualify for the tax credit.

 

[jakef801]

I'd like to say I have full confidence that Amazon is behind them, but after seeing them lose Ford, the Mercedes, makes me wonder why? I don't think we have the true reasoning behind either divorce. Also, thinking further back, am reminded that Amazon contracted another EV maker to build electric delivery vans. That also makes me wonder how secure that partnership as well? With so much invested in Rivian, why would you support a competing company? Seems a bit odd. Then with losing Ford and Mercedes, possibly these big companies are not agreeing with Rivian's general thinking? No assumptions, just questions that arise. If they were to lose Amazon, that could be the final straw. Am happy to see several delivery fans having been built and delivered, so hopefully that's a sign that the relationship is strong. Now just need them to figure out how to produce more of these things and get them delivered, while also thinking ahead to the their next projects as there's only so big of a market for $90,000+ trucks and SUV's. Lucid is proof that, just beating Tesla at its own game is not enough. Lucid pricing is so high that it has limited appeal in terms of the overall market place.

Nevertheless, Amazon is a 17% owner in Rivian. 10,000 trucks by 2030 will not be enough to fully get their fleet to net zero emissions. Hence, it would make sense thar they're looking at other manufacturers to get them to their goal (which I've read about as well).

 

[the long way downunder]

Unfortunately, what has lifted all EV and adjacent stocks like hot air balloons is in large part due to the overinflated expectations set by Musk making patently untrue forward-looking statements about future earning potential of a publicly traded company of which he is an officer …

Now that the hot air is out of that windbag, the market is swiftly taking away the discount expectations of the whole EV market.

That's not to downplay the painful fact that Rivian has fallen far below expectations (far below 50% of previous expectations for unit production, years behind expectations for establishing itself to deliver on expectations.)

On the "glass is half full" side of the ledger, I'd note that at $20, it's relatively "affordable" to acquire more shares of $RIVN to balance out shares at recent averages to establish a position with a cost basis more like say $30, which I think $RIVN will achieve in short order. Recovering to the IPO range (say $70-$100) is a long term (say 3-5 years) proposition.

I think Rivian has become an EDV company that will continue to make boutique pickups and SUVs in relatively small numbers. If the R2 becomes a runaway success (which I think is nearly impossible given the timing is in the thick of the competition from '24 thru '30) perhaps $RIVN goes above $40. Model Y numbers show market potential for 2022. I expect we'll also see Tesla market share drop as the whole EV sector of auto sales expands – this shows market opportunity for the R2.

We're about to get 22Q4 numbers from Tesla on Model Y sales, which I think will be a big number. The price discounting is necessary to overcome the tax incentive to wait, not because demand has waned but because Tesla has found the highest price the buyer will pay and now they're pushing hard to demonstrate revenue potential (to promote confidence in Tesla instead of disdain for Musk.)

Looking at just my own little irrelevant position, I won't be selling at $40 because I think the future of Rivian is to make mass market light commercial vehicles in large numbers for Amazon (which can probably buy every unit they can produce) and probably to some fleets like UPS, USPS, Fedex, etc. As these contractors become public, I think $RIVN could well revisit $70, not because of fundamentals but because it will be a winning household name brand and a name that portfolio managers will want to have to show their customers. Those funds move with heavy feet and make obvious footprints.

When $RIVN puts in two weeks of higher highs above $40, I think there will be no stopping it. But we'll first need the US economy to work its way out of recession.

 

[kurtlikevonnegut]

I'd like to say I have full confidence that Amazon is behind them, but after seeing them lose Ford, then Mercedes, makes me wonder why? I don't think we have the true reasoning behind either divorce. Also, thinking further back, am reminded that Amazon contracted another EV maker to build electric delivery vans. That makes me wonder how secure that partnership is as well? With so much invested in Rivian, why would you support a competing company? Seems a bit odd. I don't know the reasons, but with losing Ford and Mercedes, possibly these big companies are not agreeing with Rivian's general thinking? No assumptions, just questions that arise. If they were to lose Amazon, that could be the final straw. Am happy to see several delivery vans having been built and delivered, so hopefully that's a sign that the relationship is strong. Now just need them to figure out how to produce more of these things and get them delivered, while also thinking ahead to the their next projects as there's only so big of a market for $90,000+ trucks and SUV's. Lucid is proof that, just beating Tesla at its own game is not enough. Lucid pricing is so high that it has limited appeal in terms of the overall market place.

Ford backed out because they wanted to push in house development and sold shares to bankroll investments in the EV side of the house. They made a tidy profit there. Nobody knows the details of the Merc deal, but it sounds like Rivian pulled the plug to reduce costs and focus on domestic operations.

Amazon's deal was with Stellantis for something like 5,000 vans to jump start transitioning their fleet to EVs in Europe because it's going to be 5+ years before Rivian is able to put vehicles on the road there.

 

[Sgt Beavis]

Down in the $17 range this morning.

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