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Zoidz

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Unless Amazon is lying, this is good for Rivian. Then again, pessimists will be pessimists.

“While nothing has changed with our agreement with Rivian, we’ve always said that we want others to benefit from their technology in the long run because having more electric delivery vehicles on the road is good for our communities and our planet,” an Amazon spokesperson said. “That’s a big part of why we invest in companies like Rivian—to both meet our needs and to help scale technologies that will benefit others and protect our planet for future generations.”
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Excellent points.

It doesn't sound like they are even reducing anything just saying they want less vans than Rivian wanted to deliver to them in 2023. Secondly as I understand the deal with Amazon is cost+ so Rivian makes money regardless but I guess they can potentially get higher margins from other customers.

To be fair most here that are being overly speculative and harsh have been the same way on every thread about Rivian lately, so you know haters will be haters.
 

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I think everyone is being way too speculative and harsh. Amazon didn’t change their order parameters, they are still buying 100,000 EDVs from Rivian, just reducing their yearly order fulfillmen.

I guarantee you Amazon got a sweetheart deal on those EDVs and so just like Pre March 1 2022 reservation holders there arent big profit margins

by ending exclusivity it frees up Rivian to peruse other contracts with higher profit margins and may allow them to rengage with Mercedes on building vans in a joint ventur for the European market While allowing Amazon to partner with other manufacturers who have higher production capability than Rivian.

This may be a win/win.
They plan on buying 100k vans, but to my understanding it's not even binding. Imo, it's PR. If I owned 17% of Rivian, of course I'd make it out to sound promising, especially if I was in the hole, what is it now, 75%.

I think Amazon is looking around, or has been looking around for something better and or cheaper.

Again, I'm not some Rivian hater, I did buy shares, but I just don't see how this is good news.
 

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They plan on buying 100k vans, but to my understanding it's not even binding. Imo, it's PR. If I owned 17% of Rivian, of course I'd make it out to sound promising, especially if I was in the hole, what is it now, 75%.

I think Amazon is looking around, or has been looking around for something better and or cheaper.

Again, I'm not some Rivian hater, I did buy shares, but I just don't see how this is good news.
If it wasn't binding why would they need to renegotiate it?
 

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From Apple News: https://apple.news/Arcx-9Z2mTgaw-B9zRG-1pQ

Direct link (behind a paywall): https://www.barrons.com/articles/rivian-stock-price-amazon-electric-truck-a1ea00f6

Full text:

Barron’s “Rivian Stock Falls on Amazon News. It Might Be an Overreaction.”


S hares of Rivian Automotive fell after a report said the electric truck start-up is in talks to end an exclusivity pact with Amazon.com. That might have been an overreaction, judging by Amazon’s response to the news.


The Wall Street Journal reported Monday that Rivian (ticker: RIVN) is seeking to remove an exclusivity term in its agreement with Amazon (AMZN) after the e-commerce retailer ordered about 10,000 electric delivery vans for this year, which was on the lower end of Amazon’s range.


Amazon told Barron’s it still plans to purchase 100,000 Rivian vans by 2030. The company can buy vans from anyone under the terms of the agreement. Rivian, on the other hand, can only sell its vans to Amazon.


Rivian didn’t immediately respond to a request for comment about the report.


Rivan shares (ticker: RIVN) fell 3% Monday. The S&P 500 declined 0.2% while the Nasdaq Composite gained 0.5%.


However, the end of the exclusivity pact would be a good thing for Rivian. That would allow Rivian to sell commercial vehicles to more than one customer. Amazon is committed to Rivian in the long run, too.


“While nothing has changed with our agreement with Rivian, we’ve always said that we want others to benefit from their technology in the long run because having more electric delivery vehicles on the road is good for our communities and our planet,” an Amazon spokesperson said. “That’s a big part of why we invest in companies like Rivian—to both meet our needs and to help scale technologies that will benefit others and protect our planet for future generations.”


Amazon was an early investor in Rivian and holds about 17% of the total shares outstanding.


Wedbush analyst Dan Ives said an ending of the exclusivity deal would be a potential positive, but noted that skeptics remain. “It’s a potential win but right now the Street feels like Rivian cannot walk and chew gum at the same time,” Ives said. He rates shares Buy and has a $25 price target.


Rivian has had trouble ramping up its production. Wall Street expected roughly 60,000 deliveries in 2023. The company guided to about 50,000 units.


The stock’s performance has not been good, either. Shares are down 26% this year and off about 64% over the past 12 months.
Thank you for this.
 

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I must have missed this, do you have a reference for it? The original plan for the plant was for 65k/85k R1/EDV.
It was mentioned in the 4th qtr earnings call. He said the split was 55/45 R1/EDV and they are working to get the second shift for R1 up to speed, did not say when they wanted a second shift for EDV, only that they slowed the EDV production getting ready for the new motor/LFP setup.
 

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With regard to the stock price, just another example of a poorly released statement that adversely impacts investors. Technically, NOTHING changed, but the way it was perceived is as if Amazon is backing away, hence investors being worried and backing away. When in reality, the only news was that Rivian wants to be able to sell them to everyone rather than just one company. Amazon is still committed to purchasing what they said they would. Rivian is simply saying, we can built more and want to sell more. That should have been great news. Instead, the higher-ups screw up another release of info. If I wasn't so upside down on my investment, I'd be bailing just because I can't believe how the top tier of the company is running things, primarily when it comes to investor related news. Everything they say or do seems to cost investors. One step forward, three steps back. They need to hire an experienced side kick that can help out.
 

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It was mentioned in the 4th qtr earnings call. He said the split was 55/45 R1/EDV and they are working to get the second shift for R1 up to speed, did not say when they wanted a second shift for EDV, only that they slowed the EDV production getting ready for the new motor/LFP setup.
Interesting, thanks for the heads up.

It isn't in the letter to the shareholders but Claire talks about it around minute 14 of the call.

The current plan is for a small 23Q4 shutdown and another 1H24 shutdown to reconfigure the technology of the plant to support the 55/45 R1/EDV split.

Wonder why they didn't put it in writing.
 

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With regard to the stock price, just another example of a poorly released statement that adversely impacts investors. Technically, NOTHING changed, but the way it was perceived is as if Amazon is backing away, hence investors being worried and backing away. When in reality, the only news was that Rivian wants to be able to sell them to everyone rather than just one company. Amazon is still committed to purchasing what they said they would. Rivian is simply saying, we can built more and want to sell more. That should have been great news. Instead, the higher-ups screw up another release of info. If I wasn't so upside down on my investment, I'd be bailing just because I can't believe how the top tier of the company is running things, primarily when it comes to investor related news. Everything they say or do seems to cost investors. One step forward, three steps back. They need to hire an experienced side kick that can help out.
It's not news because the "contract" states Amazon can pull out anytime for basically any reason. That's barely a "contract" that's really worth nothing.

As I said the perception is bad because this is suppose to be Amazon's baby, you know the millions they purchased in stock, but now they want to possibly venture out.

Unlike others think, the optics are terrible, that's why the stock fell, again.
 

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It's not news because the "contract" states Amazon can pull out anytime for basically any reason. That's barely a "contract" that's really worth nothing.

As I said the perception is bad because this is suppose to be Amazon's baby, you know the millions they purchased in stock, but now they want to possibly venture out.

Unlike others think, the optics are terrible, that's why the stock fell, again.
I don't know exactly what the "contract" reads. Only that Amazon agreed to purchase 100,000 delivery vans over the next 10 years. I do believe, that was in a "contract". They had an exclusivity contract that Rivian couldn't sell to others. Can't imagine, even in the worst logic possible, that Rivian would sign an exclusivity contract without the promise of sales.

I think the 100,000 was probably assumed to be at Rivian's capacity as a startup. But, apparently they've figured out how to build quite a bit more. Possibly they assumed Amazon would take all 100,000 as fast as they could get them. But, with AMAZON cutting costs right now, they've chosen to only take what they're mandated to take at 10,000. That's an AMAZON problem, not Rivian. Rivian again, probably figured if they could build 25,000, Amazon would take them all immediately, but Amazon's cost cutting measures are preventing that. Thus, Rivian is disappointed that they have the capability of building 15,000+ more vans, yet aren't allowed to sell them.

Getting out of the exclusivity contract would allow them to sell 15,000 more this year and who knows how many more over the following year. Rivian's revenue's don't change if they can't get out of the exclusivity contract, but absolutely could increase significantly if they can. So, it's a case of no news or good news, not bad news. Where we are at today, it's still "no news". Nothing should be impacted. But, the way it was released made it sound bad. Hopefully, the are able to come to an agreement to get out of it and then it would be hugely positive news that should result in a notable spike.
 

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With regard to the stock price, just another example of a poorly released statement that adversely impacts investors. .
I think it's more because of the way the people reporting on it intentionally cast these releases under a bad light. They have their marching orders, it's pretty obvious to me because it keeps happening..
 

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That plan has changed since 65k R1 is ludicrously low and 85k EDV is too many.
Model S and X total sales peaked at 100K in 2017 and now are near 65K total per year. Expensive vehicles don't sell in large volume. Many people would not have bought the S or X had the 3 nd Y been available.

Many people who would like an R1S will buy a 3 row Kia or Explorer EV when available because of price.
 

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There is a real risk to Rivian not making it until 2026 when the R2 line will start, but if they can make it that far they shouldn't have an issue staying solvent. I'm confident the executives will do what they need to in order to make it that far. The green bonds seem like the right step for them to take to secure additional funding that they might not actually need, but it's the right time for them to do it because they aren't looking like they are going to be insolvent like they might be if they waited two more years.

I have no idea how anyone could look at the negotiation of the end of the exclusivity agreement as a bad thing. Getting more companies into an EDV/RCV is going to be a good thing as long as Rivian is not overselling their capabilities. And at this point I don't think they are. There still isn't a lot of competition in that space that is producing at volume, and it looks like it's one space Tesla has no interest in trying to compete for.
It looks like Amazon backing away. What are they backing away from? From EV’s in general and from Rivian.

That’s not a good look. It suggests that other people’s fears may be grounded in reality. That EV’s are too expensive and too reliant on electricity, which is a live source that could be stopped in an instant, vs fuel which lasts a while.

Consider if you were in a natural disaster situation where civilization temporarily collapsed.

Several weeks ago southern Michigan lost power. For the first three days I was thinking about how my (future) Rivian could have run my house. On day 4 of no power I realized that my Rivian and my house would be dead and I’d be SOL.

Now what if the power was out for weeks? I still could have hopped in my gas vehicle and driven elsewhere. Or if I had a gas generator I would have been fine all along.

I’m not crazy in thinking that the world could go to shit in the next decade. “The end of the world is just the beginning” is a good read, and only $2.99 in audiobook.

It’s likely that the world will be fine but maybe not. But all of that makes me question whether I want a reliable gas vehicle in a world with a ubiquitous gas delivery system or if I want to bet the farm on electric.

I’m obviously hedging. A few years ago I was talking myself out of a Rivian that I wanted so badly. Now I find I’m talking myself into one that I want less so.

All of that is to say that electrics have their place and may be the future, but lots of people are wondering if the future is now or within the decade, or if it’s a future that we should walk slowly and carefully to over the next 50 years. We’ll see.
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