Rivian going out of business? Should I buy or lease? [LOCKED DUE TO POLITICS]

[iansriv]

It's quite simple. If you think there is a chance Rivian will go out of business-don't buy a Rivian. Otherwise, buy one.

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[slomotion16]

I would be concerned if they can't resolve a couple of issues soon. They want to build a new plant, but the state won't issue permits until Rivian is in good standing with the UAW. Rivian's CEO is, like Musk, anti-union, so they have a problem there. Then, the 2024 presidential election could have a significant impact on the entire EV market as the Republicans want to cut back severely on the sales of EVs and promote fossil fuel production, which would further impact Rivian's viability. Kind of between a rock and hard place.

EV incentives is mostly irrelevant to Rivian, at least with their current models. This would highly impact Tesla, though.

 

[Rivian Head]

Don’t go with your “ gut feeling “ as some suggested. It’s a A legit concern which requires some careful analysis. I would say Rivian would survive until they launch R2 with VW funding. It’s not certain, however, if R2 will save Rivian similar to Model 3/Y did for Tesla. Unlike 5 years ago, the market is very crowded and Tesla keeps dropping its price while Elon is calling for ending the federal subsidies. If Trump wins and gets rid of the subsidies as promised, Rivian may go bankrupt. I have owned Teslas, Mach E, Rivian R1T and R1S, but my last two purchases have been model Y and Model X. I know for sure Tesla will be around. Rivian may not be around in 5 yrs

 

[Mark_AZR1T]

No one can crystal-ball the long term viability of Rivian, no one. My inclination is the same since day-dot, that regardless of the financials of Rivian, given the tech and the quality of the product, someone would absolutely acquire them, in a worst case scenario. This is no Fisker for a multitude of reasons.

We love our Rivian's....

 

[ModelXer]

EV incentives is mostly irrelevant to Rivian, at least with their current models. This would highly impact Tesla, though.

Just FYI, my comment had nothing to do with EV incentives. It was related to the construction of a new plant that would lower Rivian's production costs and make them more profitable. I'm not sure I understand what EV incentives had to do with my comments.
However, EV incentives may boost R2 and likely boost R3 sales...a good thing for Rivian's bottom line, particularly if the new plant would produce them at lower costs.

 

[Robin]

So let me get this straight... You're worried, but you're on your way to pick one up regardless? This is logical?

I'll tell you why you're worried: You haven't done any research. You haven't been paying attention to the company's progress or news/analysis written about the company. The reason you are worried is because you haven't done anything to help yourself to be informed and out of the dark. Instead of relying on volumes written by those in the know. You chose to pay attention to sewing circle hearsay from god-knows-who. And despite all that, you're throwing money into the unknown. That's why you're worried. You're worried about your [lack of] action. You're not worried if Rivian will stick around.

If you've done your research and read the actual news articles... VW is not buying Rivian. Instead, VW is so lost with their EV development that they are investing in, and starting a joint venture with, Rivian—to get themselves back on track. VW, a car company with roots in the 1930s, getting help from Rivian (for $5B). Pause and think about that. Then ask yourself, which company is in trouble? It's not Rivian. And Rivian is on-track to posting positive revenue by this Q4. That's pretty fast for a new car company that just started deliveries at end of '21.

?????

 

[Hillbilly]

I have 2. Go big or go home.

Same. We're all in.

 

[Hillbilly]

The main threat to Rivian’s viability at this point is the upcoming US Presidential election. One candidate and his VP pick are vehemently anti-EV and want to do everything they can to sink the industry. Vote accordingly if Rivian’s future is important to you.

That's misleading. You have one party that wants to push and subsidize EVs but throw around so much free money that interest rates are forced up to curb all the inflationary pressure which is reducing real income. The flip side is that the other party shits on EVs but will do more to curb inflation and lower rates.

 

[emoore]

That's misleading. You have one party that wants to push and subsidize EVs but throw around so much free money that interest rates are forced up to curb all the inflationary pressure which is reducing real income. The flip side is that the other party shits on EVs but will do more to curb inflation and lower rates.

Don’t forget about the oil industry subsidies.

 

[Dave Cundiff]

You have one party that wants to push and subsidize EVs but throw around so much free money that interest rates are forced up to curb all the inflationary pressure which is reducing real income. The flip side is that the other party shits on EVs but will do more to curb inflation and lower rates.

@Hillbilly, I presume you're referring primarily to Federal deficits.

My understanding is that, in an era where the Federal Reserve can create money for lending purposes (as long as markets trust the money so created), the relationship between deficits and interest rates is pretty complicated.

It's so easy to create money for lending purposes, that Congress long ago removed that temptation from the Executive Branch and gave the authority to the Federal Reserve. The Fed is tasked with maintaining the dollar's value AND with maintaining conditions in which most Americans stay employed.

If the President managed monetary policy, the theory goes, any President who wants to guarantee re-election would inject money into the economy several months before the election, creating lots of economic activity but not sustainably.

***

Generally both U.S. parties contribute to deficits -- one party by cutting taxes, both parties by spending on their priorities.

Scholars seem to think the U.S. economy generally performs better under Democratic presidents than Republican presidents, with lower deficits (https://www.politifact.com/factchec...ican-presidents-democrats-contribute-deficit/) and higher stock prices (https://www.cnn.com/2020/09/23/investing/stock-market-election-trump-biden/index.html). However, on brief search, the one paper I found that purports to explain these phenomena (https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.20140913) cites factors I would classify as "mostly luck."

It's not simple. I hope this helps!

 

[Hillbilly]

@Hillbilly, I presume you're referring primarily to Federal deficits.

My understanding is that, in an era where the Federal Reserve can create money for lending purposes (as long as markets trust the money so created), the relationship between deficits and interest rates is pretty complicated.

It's so easy to create money for lending purposes, that Congress long ago removed that temptation from the Executive Branch and gave the authority to the Federal Reserve. The Fed is tasked with maintaining the dollar's value AND with maintaining conditions in which most Americans stay employed.

If the President managed monetary policy, the theory goes, any President who wants to guarantee re-election would inject money into the economy several months before the election, creating lots of economic activity but not sustainably.

***

Generally both U.S. parties contribute to deficits -- one party by cutting taxes, both parties by spending on their priorities.

Scholars seem to think the U.S. economy generally performs better under Democratic presidents than Republican presidents, with lower deficits (https://www.politifact.com/factchec...ican-presidents-democrats-contribute-deficit/) and higher stock prices (https://www.cnn.com/2020/09/23/investing/stock-market-election-trump-biden/index.html). However, on brief search, the one paper I found that purports to explain these phenomena (https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.20140913) cites factors I would classify as "mostly luck."

It's not simple. I hope this helps!

I appreciate the post (and have a degree in econ and didn't want to go down the rabbit hole of the federal reserve's involvement). I wouldn't trust any media websites for data or fact checking on matters like this though.

 

[Hereforthesnacks]

We're you not around 15 years ago?

I was. And so were they. And here they are today.

Some car makers were bailed out because, if they fell, it would crush the economy and their employees and it would have killed auto supply in the US. If Rivian cases to exist tomorrow, 99.9% of people wouldn’t care. Hell, 99% of people don’t even know what Rivian is. It’s just the way it is.

I don’t think it’s fair to compare what could happen in the 2020s to a startup to what could happen to firms that have been around 100 years.

Even Tesla wouldn’t be around if it for tons of govt intervention. Which is why Elon turning his back on govt support of EVs is the most predicable, stupid, boring Elon thing that everyone knew would happen.

Buying a car from a startup is an investment in that startup. It’s buying into their product and hoping they succeed. There’s a much more significant chance they are gone than Chevy. DMC was gone. Fisher is gone. Saturn is gone. It happens.

I’m ok with the risk that Rivian may go away. And I will give them $100k for a car if they can just get the damn thing serviced in the Bay Area. He’ll, I’d give them $150k. But I need to be able to rely on it. And they aren’t quite there yet.

 

[Dave Cundiff]

I appreciate the post (and have a degree in econ and didn't want to go down the rabbit hole of the federal reserve's involvement). I wouldn't trust any media websites for data or fact checking on matters like this though.

OK, I'll bite, @Hillbilly -- though I hope we don't drag the thread too far off topic.

Whom would you trust for objective information about the effect of the parties' policies on overall economic performance, not just on EVs?

Best wishes!

 

[Hereforthesnacks]

That's misleading. You have one party that wants to push and subsidize EVs but throw around so much free money that interest rates are forced up to curb all the inflationary pressure which is reducing real income. The flip side is that the other party shits on EVs but will do more to curb inflation and lower rates.

The “free money” didn’t push up unrest rates. Money has been free since 2008 and interest rates were ludicrously low for almost 15 years. Mortgages were at 2.25% in 2021! The collapse of the supply chain and restrictions on inventory is what drove up inflation, requiring the raising of interest rates.

 

[Dave Cundiff]

Buying a car from a startup is an investment in that startup. It’s buying into their product and hoping they succeed. There’s a much more significant chance they are gone than Chevy. DMC was gone. Fisher is gone. Saturn is gone. It happens.

Nice post, @Hereforthesnacks. One small correction, from a former Saturn owner:

Saturn wasn't a startup. Saturn was created as an innovative division of GM.

Mostly good cars too, until GM made Saturn market the Saturn Relay minivan, using another division's bad engineering and thus marketing a bad car.

Having damaged the reputation of their Saturn division, GM brass proceeded to kill the division outright.

All the more reason to support an independent Rivian if we can!

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