2023 Q3 earnings (beat) results! Rivian raises production goals

[DuoRivian]

End of 2024, Normal plant will have 150k capacity. 85k R1 and 65K RDVs

the factory was expanded - this was talked about in previous calls last year and 200k is the combined new total.

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[lostinafog]

and of course the stock is down....I guess there's still selling on good
news happening.

 

[DuoRivians]

the factory was expanded - this was talked about in previous calls last year and 200k is the combined new total.

Please cite 200k capacity

 

[Yossarian]

I think there is a real possibility that many Canadians will not get the same vehicle they reserved. I have an LE vehicle reserved in 2020, but highly doubt I'll ever get it (I live in Manitoba). I think they will eventually stop producing LE vehicles....and I'll probably be offered a R1 equivalent at the new price (i.e. not pre-price hike). Hope I'm wrong...but it seems like many of us Canadians are just being stringed along.....maybe to keep the "orders" on the books for investor sentiment.

I suspect that there are still more than a handful of folks south of the border with unfulfilled LE reservations, me being one. At present, I don't have an estimated delivery date for my 2020 pre-order, but that may change with the update slated for this month.

Obviously, Rivian will stop producing the LE at some point, but I suspect that this will not necessarily mean that LE reservation holders will loose all preferred pricing. More likely, it will mean accepting the current Adventure configuration as the substitute, which will be more expensive as things like wheel options, interior configs and paint will no longer be included gratis. My guess is that Rivian will honor the pre-March pricing for those items, so while LE reservation holders will pay more, it will be on the order of a few thousand dollars, not the 20-plus percent jump of the current Adventure trim MSRP.

As far as wait times in Canada, given the map of the provinces that Rivian is apparently using, it's no surprise that the wait times are so long:

 

[AbhorViolence]

This is insane. We were finally up a little after earnings yesterday and this morning premarket, and now it's DOWN -4% on the day, and about a -12% drop in just the last 2 hours.

Meanwhile trash company freaking Vinfast is up 10% today as I write this.

Already bought more at low 17. Just an insane market right now.

 

[vista1984]

everyone expects gross margin will continue to improve significantly compared to previous quarter. but it only increase 1%. (from -37% to -36%) which is bad.

it means more cars rivian sells bigger loss they have.

well, any warranty service costs (e.g. car rental) also affect gross margin so improve quality and lower service cost should also improve the gross margin.

 

[Biturbowned]

I’ll admit, this pricing action makes no sense to me, I guess I’ll throw more at it

 

[Diddy123]

I’ll admit, this pricing action makes no sense to me, I guess I’ll throw more at it

Agreed. By almost every measure, it was a great quarter. I just don't understand...

 

[Yellow5]

This movement feels similar to what we saw after the call last quarter. Good new for Rivian, which is the most important result, and a pull back of the stock. People get scared when expected losses become actual losses, which is completely irrational. The market is well known for being irrational, but it really smarts when it is irrationally negative on your favorite company. There was so much optimism not so long ago, I'm certain it will return at some point in the future.

The long story is that people here are early investors. When the company becomes profitable (which it inevitably will do) there will be a wake up. People are wanting to time the wake up moment and day trade Rivian while it is highly volatile. The stock will increase rapidly after that point, and even more when/if advertising makes this company more well known to the average joe.

That can't happen until there is a greater manufacturing capacity and less expensive offerings, which should more/less be bundled within the R2 release. Assuming a good landing on R2, especially if it involves larger casting techniques which decrease manufacturing/materials and increase safety/reliability, it will be a watershed moment. R2 could take the majority of the Small SUV market if there was enough production capacity and it has enough Rivian DNA. It would ultimately require more manufacturing capacity than GA can provide, and If that can occur in the subsequent year or two the sky is the limit for this company.

I'm onboard for that scenario, and from what I can tell it is not an unlikely scenario. That scenario ignores potential profits from expanded delivery van sales, service fees for autonomous driving, charging network expansion, right hand drive models for international markets, and the potential for international manufacturing to serve international markets. There is simply too much upside here, it won't just be Tesla and BYD.

All the other smaller new players and most of the legacy manufacturers are not making the shot for various reasons. Overall, Rivian is mostly unopposed as the one potential threat, the Cybertruck, doesn't compete on the SUV space and looks like an origami project gone wrong.

 

[Zoidz]

This is insane. We were finally up a little after earnings yesterday and this morning premarket, and now it's DOWN -4% on the day, and about a -12% drop in just the last 2 hours.

Meanwhile trash company freaking Vinfast is up 10% today as I write this.

Already bought more at low 17. Just an insane market right now.

I’ll admit, this pricing action makes no sense to me, I guess I’ll throw more at it

Agreed. By almost every measure, it was a great quarter. I just don't understand...

Same thing happened with AAPL in the 2006 - 2009 time frame. iPhone sales were growing, Apple hit or beat their numbers, and the stock got the same treatment as Rivian is getting now.

 

[Blueassassin]

All moving in the right direction!

If only the stock matched the company.

 

[DuoRivians]

Don’t worry about the intraday stock price. It’s very noisy. Algos could be crushing lcid and rivn because they think they’re the same. Over time, it should play out properly

 

[mkg3]

Agreed. By almost every measure, it was a great quarter. I just don't understand...

because the stock price is supposed to reflect future value and not the past.

The whole auto market pie has shrunk due to high rates and fear of recession. EVs are no exception. While the EV market slowdown is overstated, if the pie is smaller, then the EV portion will shrink as well.

The reason all EV stock prices are depressed (auto, battery and lithium companies), is macro economic conditions and shorting much of the OEMs expecting them to go lower and suffer from the economic condition. The fact that the loss per vehicle is down $2k/vehicle is simply because they made more vehicles. The denominator just got larger (COGS/total units produced).

The good news is the RCV being open to others (new addressable market). Fear is that the new unprotected pricing of R1 make take a hit due to high interest rates and lower cost alternatives (I don't mean like R1, rather another truck or SUV ICE/hybrids/EVs with lower price points).

 

[GHuff]

Note, it’s 16,304 vehicles produced, not delivered.

To save on costs, they really need to make strides on improving SC wait times, and lowering those payments to Enterprise.

Unfortunately, I think it does make more sense for Rivian to "fix" the problem with Enterprise rentals while they ramp up production and hiring and service centers. It's a band aid. And yeah it costs a lot, but it is a relatively small globally.

Here's my very conservative napkin numbers:
50,000 vehicles. Say 20% get serviced a year. That is 10,000 vehicles in service centers a year. Average time at service of 14 days. That is 140,000 days of rentals. At $100/day, that is $14,000,000 in rental fees. Not an insignificant number, but also not moving the needle at all. Those rental fees are roughly 1% of their total net loss of $1.37b.

 

[SANZC02]

….it means more cars rivian sells bigger loss they have…..

I can’t tell if you are joking or just do not understand the numbers here. There are fixed cost to having a factory so when running at a substantially lower rate than the capacity those cost are spread over fewer vehicles. The more you make the more cars those fixed cost are spread over so the cost is reduced.

A lot of the big drops from Q2 and Q3 of 2023 were for cost per vehicle came from the reconfigured EDV where they reduced cost by ~35% when they shut that line down earlier this year. They have similar improvements coming in Q2 ‘24 for the R1 line where a similar cost reduction is expected that will show in Q3/Q4 numbers.

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