Why stock getting hammered last few days?

[phaduman]

Something that institutional investors know and hence selling, but retail investors (like some of us) don’t?

I am not reading any bad news on early R2 quality or volume or cost issues.

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[Dave Cundiff]

José Castillo has what I think is a good analysis:

https://riviantrackr.com/news/why-rivian-stock-keeps-falling-despite-r2-launch-and-q1-earnings-beat/

Best wishes!

 

[Tim-in-CA]

I have come to the unfortunate realization that my investment in Rivian (and Lucid) will eventually be used for a future tax loss harvesting event.

 

[Timbuk2000]

Be patient. The market is waiting for actual sales to occur. I thing the pent up demand is obvious. Now Rivian needs to execute well, and they will.

 

[UnsungZero_OldTimeAdMan]

Effects of an unresolved war spreading. While Rivian doesn't build ICE, many of the components that are needed to build an EV are still tied to petroleum supply and prices. Cost to make tires. Cost to make things out of plastics. Cost to ship parts and raw materials from one part of the world to another. Cost of gas-electric turbines to generate power to run chip/circuit board and textile factories. It's eating into everyone's bottom line and creating investor doubt.

 

[DuoRivians]

My take on why Rivian and Lucid are going nowhere:

- US all but killed big EV demand by getting rid of the $7500 credit

- NEVI funding has been entirely cut now, so no more federally subsidized chargers

- Regulatory credits are completely gone too—big part of gross profits for Rivian

- Internationally, China is absolutely crushing EV sales. Even Canada has now opened up to 6% tariffs for the first 49,000 sales. Tesla is importing cars from China, instead from the U.S., for Canada sales

- Plus, internationally, everyone hates the U.S. and its products because of Trump

All put together, effectively, the only viable car market for Rivian and Lucid and other U.S.-only based manufacturers is the U.S. market. And the U.S. market alone isn’t really big enough to sustain a large and growing sales fleet.

Rivian needs at minimum 400k/yr cars to break EBITDA even. It’s not close to that any time soon. And Rivian only has enough cash on hand to pay for maybe 3-4 years of operations without having to raise more cash somehow.

So, can Rivian get to 400K sales before cash runs out in a couple of years? Especially without the $7500 credit and regulatory credit sales? I’m not sure, I think they’ll have to raise more money.

And even so, how many sales can the U.S. itself really generate? Remember, internationally, China is crushing it and no one really likes US products anymore. And Europe has their own car manufacturers to look after.

Last, the only modern car company that “made it” was Tesla. And they did it because they received so many govt subsidies from regulatory credits and early consumer EV credits. Funny how Elon helped close that door after Tesla went through it…

So, all in all, I think it’s really challenging for Rivian or Lucid right now. Good cars may not be enough for the 5 reasons above

 

[TexasBob]

I do not want to be negative, but Rivian has a very steep hill to climb in an incredibly competitive segment in a flat-to-declining market. Even in this highly protected geography, the higher end market for R2 is confronting very compelling vehicles from BMW, Volvo, Mercedes, and an upcoming adventure competitor from Scout. The low end is saturated with Toyotas and Subarus and Chevys. Tesla is trying to straddle the same market. And every single one of those competitors has a substantially lower per vehicle cost base. And we do not know yet what, but we expect more from the VW group, Ford, and there is even a tiny chance Lucid will live.

And that is in the easiest market they have where the total segment size is maybe 500k this year. Meanwhile the business will need to have an export reality and in Canada, Europe, UK, Australia, they are smacking into the China manufacturing juggernaut. The R2 competes reasonably well against current US offerings on powertrain but it is significantly behind vs the current EU generation (c.f. the iX3) and the BYD blade vehicles with their 593 charging are brutal. And R2 is ahead on most autonomy metrics in the US but playing catchup vs China and the increasingly ubiquitous NVIDIA Hyperion system which is much further advanced, plus the mobileye chauffeur system plus the snapdragon ride system (not to mention XPeng Turing and Tesla) means that Rivian's multibillion dollar bet on autonomy has a 50/50 chance at least of being a very expensive also-ran.

None of this is saying a single bad thing about Rivian. It is just recognizing that it is trying to build sailboats in a hurricane. It may succeed, but it is very very tough. My 2c.

 

[Simplejack]

Atleast we got 6% bump today

 

[Timbuk2000]

Rivian is also a software innovator that is currently designing its own processors. The market will definitely reward Rivian stockholders if the execution goes well over the next few years.

 

[phaduman]

all great points. To sum it up - for my own digestion, for rivian to become a strong player (& growth stock), ie appeal to broad market segments globally:

(Not in any particular order)

1. strong SW player (ease of use)
2. strong AI player (autonomy)
3. range and speed of charge (e.g. 800v, 15 mins to 80%, 400mile range)
4. Reliability
5. Service availability (nationwide)

I would rate them as:
1. 7/10
2. 5/10
3. 5/10 (many disappointments here even from current rivian owners looking at R2)
4. 6/10
5. 5/10

 

[HaveBlue]

The whole market took profit

 

[UnsungZero_OldTimeAdMan]

all great points. To sum it up - for my own digestion, for rivian to become a strong player (& growth stock), ie appeal to broad market segments globally:

(Not in any particular order)

1. strong SW player (ease of use)
2. strong AI player (autonomy)
3. range and speed of charge (e.g. 800v, 15 mins to 80%, 400mile range)
4. Reliability
5. Service availability (nationwide)

I would rate them as:
1. 7/10
2. 5/10
3. 5/10 (many disappointments here even from current rivian owners looking at R2)
4. 6/10
5. 5/10

The biggest thing missing from the list is increasing levels of vertical integration. Less they are beholden to suppliers, mean lower cost and greater control over quality and their destiny.

 

[phaduman]

You are right - those are key internal design decisions that should positively influence the customer-facing aspects that I think I am capturing in my list - that customers will use to compare with other offerings.
Tesla (& Apple etc) have those internal architecture advantages that translates into consumer benefits.

 

[Riviot]

I have come to the unfortunate realization that my investment in Rivian (and Lucid) will eventually be used for a future tax loss harvesting event.

Every Boxing day, I sell just enough to take my $3k loss for the year...

Then 02Jan I move it over to my Roth and buy it right back 🫠

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