2021 Q3 Rivian Shareholder Letter – December 16, 2021. 71K Preorders Received

[ChrissyOne]

From all reports I’ve read, Rivian is taking a measured approach to their product release, and making sure they get the quality right rather than rushing anything out. This is very Amazonian. If they ship 1,000 rather than 1,200 vehicles this year, and maintain that quality, then they are winning, both for immediate customers and their long term goals. It could be much worse. Cybertruck was supposed to be shipping by now, and they haven’t even figured out the windshield wiper.

Taking this as a sign that the wheels are coming off is just nonsense.

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[SeaGeo]

I agree. I just do not see Rivian breaking 15k in 2022. If I let my cynicism have it say my guess would be between 6k-12k that get produced and actually make it into customer hands.

Looking at some polling of preorder holders, it looks to me like they have about 15k launch editions (which is much more than I was previously guesstimating). Either the site the poll was collected from is skewed in a *very* weird way, it looks like they're at least planning on delivering quite a bit more than 15k trucks. Again, we are all dubious of any timelines Rivian puts out, but I'm sure they're not trying to intentionally set delivery windows that can't be met.

 

[RideAlong]

Unfortunately, reality is setting in and I so wanted an R1S.

The burn rate is high while production is low and they are trying to keep the barbarians at the gate with the announcement of a factory in Georgia. But what concerns me most is the founder & CEO owns less than 2% of the company, meaning Rivian won't have another chance at a big raise but rather will be a candidate for a takeover if all goes south.

The canary in the coal mine is what Ford does with its shares. Does it hold on for the long run hoping for Rivian's success or does it sell its stake seeing Rivian as a competitor with hopes of buying Rivian's tech pennies on the dollar?

Tech companies went through the same thing in 2000 when it became obvious most were selling vaporware.

I hope I am wrong because there is no better EV SUV built than the R1S.

This.

 

[SeaGeo]

From all reports I’ve rad, Rivian is taking a measured approach to their product release, and making sure they get the quality right rather than rushing anything out. This is very Amazonian. If they ship 1,000 rather than 1,200 vehicles this year, and maintain that quality, then they are winning, both for immediate customers and their long term goals. It could be much worse. Cybertruck was supposed to be shipping by now, and they haven’t even figured out the windshield wiper.

Taking this as a sign that the wheels are coming off is just nonsense.

Yeah, my reaction to them being short a couple of hundred vehicles in 2021 is "meh". It's on RJ to keep the long term plan in tact while making sure his staff execute on their short term priorities. Which may not always align with external investors goals (for example, get quality right *now*, to facilitate a better 2022 ramp). The good thing is, he has the phone number of a guy that did that for what... 20ish years?

I just don't get people being bothered by the numbers today personally.

 

[ChrissyOne]

The company is at a critical juncture. The assembly line is running, and they are doubtless working out bugs and optimizing processes. They have to get this right to get Normal to 200k, and they REALLY have to have it under their fingers if they’re going to replicate it in Georgia. Otherwise, you risk “production hell.”
Rushing this for PR is not going to do them any favors - especially not in a Covid world where everything everywhere is delayed.

 

[SeaGeo]

especially not in a Covid world where everything everywhere is delayed.

This. Why not take their time, get shit right now and stockpile supplies as much as possible while production is slow. Because they'll probably outrun supplies at some point next year anyway. No reason to floor it when they see a stop light that's yellow at the other end of the block. They're still going to have to wait for the light to cycle green.

 

[EVTrucking]

ChrissyOne:
“Taking this as a sign that the wheels are coming off is just nonsense. “

Today’s reported results are disappointing, not unexpected and certainly not a sign the wheels are coming off.

Rivian’s cautious methodical production ramp due to Amazon’s influence is pure speculation. RJ (MIT educated) is probably the driver of that. I am also sure the slow start is due to maintaining high qualiy, production bugs and possible supply issues. Not to mention the shortage of employees.

My MME has been sitting in Salt Lake city for 3 weeks waiting for a car carrier driver with no date for when one will be available.

When taking into account Rivian’s miss and the world wide supply chain issues I do not see optimism for short to mid term improvement in delivery dates. But I certainly do not predict that the wheels are falling off.

 

[ds2000]

I missed the call but read the earnings, I didn't see any mention of Euro pre-orders yet. Did anyone ask in the call?

 

[Guy]

I missed the call but read the earnings, I didn't see any mention of Euro pre-orders yet. Did anyone ask in the call?

No mention of Europe. Given the Georgia site is probably going to cover exports and that won’t be up and running until 2024 I would not expect European deliveries until late 2024 at the earliest. There is more than enough US and Canadian demand at this time to satisfy.

 

[Trandall]

My takeaways from the call:
Rivian remains at a critical juncture where long term strategic decisions are vitally important (duh)... IMO their strategic plan seems largely sound although I have concerns about their Forever program.
Rivian is well capitalized near to mid term I don't believe there need to be worry they will need another offering that would dilute early investors *institutional investors likely have some exercisable options but this should be negligible.
Rivian will not be making decisions to boost short term valuation. Nothing in their company culture shows a propensity towards this and it really doesn't matter if their per share price is at $68 or $180/ share. IMO it will continue to be a wild ride in the near term.
Fleet RDV platform/ fleet management is more important for the company, and their strategic mission, than consumer R1 line. That's ok IMO they are not mutually exclusive they can both be great.
Near term production ramp cannot be extrapolated from known data. It's a futile endeavor... doesn't mean we can't still have endless debate! What is clear is when Rivian RJ uses the word "by" he intends by the end of. Battery module production was cited as a current bottle neck this will likely be fixed in early 2022 then it will be delivery, then service, then chips, paint throughput, who knows.
Lastly Rivian is going to raise prices on their vehicles especially consumer R1 probably more than 10% by next year and another 3-5% the following year. I hope for selfish reasons they keep existing reservation prices and only increase at time of preorder but my guess is a large pack R1T order placed in 2023 will be minimum $82K & R1S $85K.

 

[Bobthebuilder352]

I fully support Rivian doing a slow release to get out the kinks to lessen the Tesla like photos/complaints we all saw about panel gaps and water in taillights. That said, I’m very curious to start seeing metrics of service claims. Employee/family cars won’t track accurately but consumer deliveries should in theory become public and to me that’s the best gauge we’ve got at the moment.

 

[Rivian_Hugh_III]

Do we have any idea of the breakout in preorders between R1T and R1S?

Also, regarding folks’ predictions about 2022 production, would that be total vehicles or just one category?

My preorder number is roughly 45,000. If Rivian may only make 15,000 vehicles in 2022 I have years to go. But if it’s 15,000 of each, I’ll be much closer to reception.

 

[Guy]

Do we have any idea of the breakout in preorders between R1T and R1S?

Also, regarding folks’ predictions about 2022 production, would that be total vehicles or just one category?

My preorder number is roughly 45,000. If Rivian may only make 15,000 vehicles in 2022 I have years to go. But if it’s 15,000 of each, I’ll be much closer to reception.

From surveys the breakdown is 60:40 T vs S. I would expect that to get closer to 50:50 over time. When we say 15k next year (as a guess) that is for the combined R1 volume. Being number 45000 you should get yours first half of 2023 from what has been said. You will get an email from Rivian by the end of the year with a delivery window.

 

[ChrissyOne]

Rivian’s cautious methodical production ramp due to Amazon’s influence is pure speculation.

Oh it’s certainly speculation, and I do not imply that this is a direct influence. But I do know how Amazon thinks about growth. They work on very long timescales, and they don’t fret about a small delay if it means creating a better customer experience. And if they saw Rivian rushing this to please Wall Street or Twitter followers, they would not have entered this partnership. I really doubt that Amazon sees Rivian as some company they own a part of - everything they do is part of the flywheel that contributes to the virtuous cycle of the larger business, and it’s hard not to see the company building their custom-made last mile logistics solution as being a vital seat at that table.

Some further speculation - We’re only seeing R1s being delivered now because Amazon has built enough of their own supply chain to mitigate the general world-wide slowdown. If they were NOT doing this, and Rivian parts were delayed, then someone in Logistics would get an email from Jeff that said:

“?”

 

[virgnia_rivian]

See ya around Old Town when we get our R1T......we are scheduled sOOn.

If you get yours first, you'll have to let me check it out ;-)

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