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

[Zorg]

Let me nitpick - you're implying they were doing poorly up until now. But they've been consistently beating estimates since they went public. I would say I am glad they are still doing good and are still executing on track despite the inevitable unforeseen problems and economic environment.


Plant capacity for R1 vehicles is currently 65K, which will become 85K next year when they reconfigure the Normal plant (the rest of the 150k plant is dedicated to the EDV/RCV). Gross profit is expected to be positive in 2H24. They will reach positive gross profit with the current plant - that is not dependent upon the GA plant opening up. The R2 is a strategy for GROWTH, not a necessity for being profitable.

You don't need to be selling a million cars to be making a profit. There are many companies and many models, especially high end, which produce modest numbers but good profits. For example, Lamborghini sold less than 10k cars of all models last year, and they had a record profit.

Give Rivian some credit for researching the market and targeting a segment they knew they could compete in, as well as making a business plan with a path to profitability based on realistic projections of market segment and share.

Let me nitpick - you're implying they were doing poorly up until now. But they've been consistently beating estimates since they went public. I would say I am glad they are still doing good and are still executing on track despite the inevitable unforeseen problems and economic environment.


Plant capacity for R1 vehicles is currently 65K, which will become 85K next year when they reconfigure the Normal plant (the rest of the 150k plant is dedicated to the EDV/RCV). Gross profit is expected to be positive in 2H24. They will reach positive gross profit with the current plant - that is not dependent upon the GA plant opening up. The R2 is a strategy for GROWTH, not a necessity for being profitable.

You don't need to be selling a million cars to be making a profit. There are many companies and many models, especially high end, which produce modest numbers but good profits. For example, Lamborghini sold less than 10k cars of all models last year, and they had a record profit.

Give Rivian some credit for researching the market and targeting a segment they knew they could compete in, as well as making a business plan with a path to profitability based on realistic projections of market segment and share.

Hello captain obvious!

Where did they state that they will have positive gross margins next year? Definitely a good sign. The real question remains how big is the market for $80-100k trucks and SUV. Clearly, based on their spending, they're not playing the niche market angle and don't aim to be Lambo. I want them to succeed as I love my truck, but it's not a slam dunk.

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[SANZC02]

Hello captain obvious!

Where did they state that they will have positive gross margins next year? Definitely a good sign. The real question remains how big is the market for $80-100k trucks and SUV. Clearly, based on their spending, they're not playing the niche market angle and don't aim to be Lambo. I want them to succeed as I love my truck, but it's not a slam dunk.

They have been saying that for several quarters now and reiterated it in the q3 earnings. The recorded earning calls are on their website, you can go listen to them.

 

[vista1984]

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 heard Vinfast has very very few outstand stock in the market (most of stocks are held by owner). which means the price means nothing.

 

[vista1984]

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.

You can talk about general mfg costing but it still hard to explain for cost of revenue went up alot.

It looks like to me that their raw material prices are too higher which drives the cost of revenue up.
rivian probably allocate higher warranty reserve due to quality issues. (without the breakdown, i can only guess. )

for such pace, it is hard to tell if rivian can have a positive margin by 2024.

I just say that what shareholder may care.
I am also Rivian shareholder, and not plan to sell in 3 years.

 

[DuoRivians]

You can talk about general mfg costing but it still hard to explain for cost of revenue went up alot.

It looks like to me that their raw material prices are too higher which drives the cost of revenue up.
rivian probably allocate higher warranty reserve due to quality issues. (without the breakdown, i can only guess. )

for such pace, it is hard to tell if rivian can have a positive margin by 2024.

I just say that what shareholder may care.
I am also Rivian shareholder, and not plan to sell in 3 years.

On the call, Claire said:

Excluding lcnrv charges, which are in the rear view mirror really because they’re accounting only, Rivian’s gross margin was -$16k per vehicle. Which would be $16k improvement from last quarter.

Claire also mentioned that a post-price hike priced R1S is currently contribution margin positive.

And of course, EDVs are contribution margin positive, because they’re “cost plus” pricing

 

[Zorg]

You can talk about general mfg costing but it still hard to explain for cost of revenue went up alot.

It looks like to me that their raw material prices are too higher which drives the cost of revenue up.
rivian probably allocate higher warranty reserve due to quality issues. (without the breakdown, i can only guess. )

for such pace, it is hard to tell if rivian can have a positive margin by 2024.

I just say that what shareholder may care.
I am also Rivian shareholder, and not plan to sell in 3 years.

It would indicate that fixed fees are a smaller portion of the costs. Then again, they had their inventory write down and newer supply deals that lower their costs going forward.

 

[SANZC02]

You can talk about general mfg costing but it still hard to explain for cost of revenue went up alot.

It looks like to me that their raw material prices are too higher which drives the cost of revenue up.
rivian probably allocate higher warranty reserve due to quality issues. (without the breakdown, i can only guess. )

for such pace, it is hard to tell if rivian can have a positive margin by 2024.

I just say that what shareholder may care.
I am also Rivian shareholder, and not plan to sell in 3 years.

You do not have to guess, listen to the earnings calls that they have. You can hear them on their website. It explains a lot about their projections and gives some insights on how the material costs are improving.

Sure not like you are sitting in their board meetings but much better then pure speculation.

The Q&A section is frustrating, seems like the analyst just want to hear their voices on the call and several ask the same questions but the calls are still informative.

 

[vista1984]

You do not have to guess, listen to the earnings calls that they have. You can hear them on their website. It explains a lot about their projections and gives some insights on how the material costs are improving.

Sure not like you are sitting in their board meetings but much better then pure speculation.

The Q&A section is frustrating, seems like the analyst just want to hear their voices on the call and several ask the same questions but the calls are still informative.

Sure I can hear when I have chance. For long term I think they will success, therefore I don't really pay attention to the short term price change.
I just wanted to point out that why the stock price went down in the previous posts.

 

[solaskaze]

Meanwhile, LCID announces they are struggling, so the market cancels everything they just heard in the RIVN report just 2 days ago

 

[VSG]

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.

Yes it was announced almost a year ago I think, but it's not clear to me that ever happened. I think their factory expansion went towards the Enduro motor assembly instead, but I haven't seen any official information about this. As far as I know the combined R1/RCV assembly lines still have a capacity of 150k.

Oh and @DuoRivian, since you're the new guy here, do you mind changing your user name? It's confusing to read your back and forth with @DuoRivians ...

 

[SANZC02]

Another RJ interview…

 

[VSG]

Hello captain obvious!

I was promoted, it's Major Obvious now ...

 

[DuoRivian]

What happened to the touted factory expansion last year which was meant to take the original 150k capacity to 200k?

 

[DuoRivians]

What happened to the touted factory expansion last year which was meant to take the original 150k capacity to 200k?

This was never stated. Again, please cite

 

[AbhorViolence]

Bought more at $16.75. Only positive news as usual, besides Lucid but that was obvious. You'd think ww3 was happening the way the stock is crashing for no reason. Got my average under 17 now and plan on holding a while from here.

-10% swing today from after the open till now.

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