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

[Electric Rivilution]

Highlights:

• EPS: -$1.19 vs -$1.32 est
• Revenue: $1.34B vs $1.31B est
• Gross profit: -$477M (vs -$917M in Q3 2022)
• Operating expenses: $963M
• Net loss: -$1.37B
• $9.13B cash on hand (down 34% YoY)

Full deck (shareholder letter):
https://downloads.rivian.com/2md5qh...3_Shareholder_Letter_Final_11.7.23_NASDAQ.pdf

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[DuoRivians]

All moving in the right direction!

 

[RivRyan]

I was looking for a better result on gross profit per vehicle (loss down about $2,000/vehicle to $30,500). I had expected the average price per vehicle to go up as, older orders at fixed low prices were filled and new orders came in. That didn't happen and in fact, the APPV is down nearly 4%.

Cost-cutting on parts and economies of scale as they ramp up have only helped so much. It looks like the cost per vehicle went down about $5,000. Great. But it would take another 6 times as much cost-cutting to turn a profit.

I agree that there's lots of good news here. But these are numbers I'm concerned about.

 

[DuoRivians]

I was looking for a better result on gross profit per vehicle (loss down about $2,000/vehicle to $30,500). I had expected the average price per vehicle to go up as, older orders at fixed low prices were filled and new orders came in. That didn't happen and in fact, the APPV is down nearly 4%.

Cost-cutting on parts and economies of scale as they ramp up have only helped so much. It looks like the cost per vehicle went down about $5,000. Great. But it would take another 6 times as much cost-cutting to turn a profit.

I agree that there's lots of good news here. But these are numbers I'm concerned about.

I’m not concerned. Q3 probably had a lot more pre-price orders being fulfilled as R1S really ramped up. The average price is heavily influenced by the mix of pre v post price hike

 

[RivRyan]

That's an interesting point. I was counting on the mix leaning closer to post-price hike, but I forgot how the mix of truck and SUV would affect that.

 

[R1TS]

This makes it seem lik

I’m not concerned. Q3 probably had a lot more pre-price orders being fulfilled as R1S really ramped up. The average price is heavily influenced by the mix of pre v post price hike

This makes it seem like the mix between T and S is heavily towards the S. Obviously, not unexpected since SUVs are more popular. But, this may mean more than anyone would have expected. The demand for the T is just not there really, in relation to the S. Market for a $90-$100K electric truck is just not there.

 

[Redline]

I'd bet Q3 was full of pre-price increase holders like me. I know there were a ton of us on here, and I was one of those who took deliver on the last day of the qtr. I bet we see a big improvement in Q4.

 

[Chewy734]

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.

 

[Supratachophobia]

I was looking for a better result on gross profit per vehicle (loss down about $2,000/vehicle to $30,500). I had expected the average price per vehicle to go up as, older orders at fixed low prices were filled and new orders came in. That didn't happen and in fact, the APPV is down nearly 4%.

Cost-cutting on parts and economies of scale as they ramp up have only helped so much. It looks like the cost per vehicle went down about $5,000. Great. But it would take another 6 times as much cost-cutting to turn a profit.

I agree that there's lots of good news here. But these are numbers I'm concerned about.

Wait, why do people think they are losing 30k per vehicle? Like, they aren't spending 120k in parts to build a vehicle that sells for 90k. Their "loss" per vehicle (stupid way of looking at it) gets reduced by making *more* vehicles and reducing/keeping their spending in check (RAN, service center, payroll, etc.).

 

[iansriv]

Was there any mention of pending order numbers? Does Rivian have any plans to advertise? Most people don't seem to know what Rivian is. Ben Affleck and Alan Ruck are not going to cut it.

 

[KootenayEV]

I also took delivery of my truck in Q3 and had pre-order pricing (which I still find crazy they honoured, but I'm very thankful for it!) I wasn't expecting much improvement in Q3 for "gross margin" because Dual Motor didn't materially contribute. I expect Q4 to look quite a bit better, with another step change Q3 '24 after they incorporate the simplifications in production (the network topology changes coming to the plant during downtime in Q2 '24).

 

[KootenayEV]

Clair (CFO) just answered a question around margin; significant improvement in material cost (related to EDV delivery volume, already margin positive platform; also saw material cost improvement for R1 due to purchase agreement improvements, plus a small portion for Dual Motor).

 

[KootenayEV]

RJ answered a question on demand for EDV (RCV);
- working on releasing exclusivity agreement for awhile; building relationships with diverse operators in the meantime
- common element is running pilots to prep their system for ingesting new type of vehicle (e.g. charging infrastructure, operating procedure); announcing soon a range of different pilot programs that will (may?) lead to larger orders
- best van option in their opinion

For R1 demand;
- maintain a strong market share position at R1 price platform (>75k)
- brand connected incredibly well with consumers; continued excitement for brand, manifest with strong residual values (ie used prices)
- this is before launched additional variants; DM, Max, additional trim config in '24, Standard pack; select models will have leasing program (create additional avenue to access product with today's interest rate)

 

[Redline]

Rivian to introduce leasing later this year in certain regions on R1T only. More details likely to come on earnings call. Will expand program to R1S and other models as program grows

 

[Riviot]

Opening up RCV?!

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