Bloomberg Article on Rivian Production & Volume

[filthy farmboy]

There is a huge unknown factor in this timeframe: how many reservation holders will decide to hold off when the time comes to actually make that $80K payment? If half the people ahead of you in line chicken out that could change your timeframe quite a bit. Something like 24% of model 3 reservations canceled, that's a cheaper car from a more established automaker.

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[LoneStar]

This is why I am dumbfounded that Rivian has not yet started the order "finalizing" phase. Lots of talk about that happening around 30-days ahead of a customer's build/delivery. That seems ridiculously short-notice for a "gate" decision to purchase or not (or delay with non-L.E.) and how that impacts production planning. I would think they'd want good clarity to firm up production plans with at least 45-60 days notice. Heck I would have said 90-days if it wasn't already that time now.

 

[skyote]

There is a huge unknown factor in this timeframe: how many reservation holders will decide to hold off when the time comes to actually make that $80K payment? If half the people ahead of you in line chicken out that could change your timeframe quite a bit. Something like 24% of model 3 reservations canceled, that's a cheaper car from a more established automaker.

Absolutely. I think that number will be at least 20%, & likely higher due to 2 main factors: 1) the CyberTruck and other forthcoming EV "competition", & 2) COVID financial strain. My guess is closer to 30% attrition, but I think that will be less for the earliest of preorders (very early adopters).

 

[R1S Maineiac]

There are some good tidbits in here about production & volume.

Do we have any members here with knowledge of production ramp process & volumes? I'm curious how quickly Rivian might be able to hit the first year average of 800 vehicles per week.

https://www.bloomberg.com/news/arti...an-seeks-3-in-a-row-ev-debuts-defying-history

Amazon-Backed Rivian Seeks 3-in-a-Row EV Debuts, Defying History

Rivian Automotive Inc., the electric-truck startup backed by Amazon.com Inc., is running the automotive equivalent of a three-ring circus: attempting to launch a trio of new vehicles in a factory that made its last car six years ago.

The push reflects a desire to get out ahead of battery-powered trucks from more established rivals, including a Hummer pickup from General Motors Co. and Tesla Inc.’s Cybertruck. Rivian has high hopes for its pickup and sport-utility vehicle but is counting on an Amazon-dedicated delivery van as a guaranteed source of revenue, said people familiar with the company’s strategy.

Rivian hasn’t publicly stated its production goals, but these people said the startup is building annual capacity for about 300,000 vehicles and aims to make as many as 40,000 in its first full year -- or an average of almost 800 a week. That compares with the nearly 5,000 vehicles a week Tesla manufactured at its factory in Fremont, California, in 2018 -- the first full year of production for the mass-market Model 3 sedan.

Amazon and Ford Motor Co. are providing financing and operational advice, but output of that magnitude across three different models is a tall order for an untested business.

“It’s such a huge step going from producing prototypes to actually putting together a thousand vehicles a week,” said Mark Wakefield, head of the automotive practice in the Americas at consultant AlixPartners LLP, who advises startups. “It’s hard to over-emphasize that point.”

A spokesperson for Rivian declined to comment on its production targets.

Retrofitted Plant

The Irvine, California-based company’s three-vehicle gambit is playing out in a 2.4 million-square-foot factory 38 miles east of Peoria, Illinois, in the central part of the state. The former Mitsubishi Motors Corp. plant has been retrofitted with advanced robotic and other production technology to match the innovation of the vehicles to be manufactured there.

Engineers, technicians and other staff are swarming the plant in an all-out effort to keep the schedule from slipping further after experiencing Covid-19 and supplier-related delays last year. They’ve taken over entire hotels in the college town of Normal, Illinois, where the factory is located. Pre-production builds of Rivian’s R1T pickup and R1S SUV already are moving down a purpose-built, high-tech pilot line, as engineers work the bugs out.

“They are not only launching vehicles, they’re launching a plant,” said Jeff Schuster, president of Americas and global vehicle forecasting at researcher LMC Automotive. “So their risks are stacked.”

Adding to the complexity, Chief Executive Officer R.J. Scaringe is planning to take the company public as soon as the end of this year, and he’s scouting locations for a European factory, according to people familiar with its plans. Rivian is expected to be valued at about $50 billion when it goes public, they said.

The company’s ability to execute on its daring plans rests largely on its ringmaster. The 38-year-old Scaringe, who holds a Ph.D from the Massachusetts Institute of Technology, is months away from achieving a goal to manufacture EVs set 12 years ago when he founded the company. He later secured seed money from early-stage Saudi and Japanese interests that shared his vision.

Even before making its first car or truck, Rivian made a name for itself based on its innovative flexible-vehicle architecture -- and its fundraising prowess. Scaringe’s vision for zero-emission SUVs and trucks has attracted more than $8 billion in investment from corporate partners and Wall Street institutions including D1 Capital Partners, Fidelity Investments and T. Rowe Price Group Inc.

Daunting Historical Odds

In the high-stakes business of carmaking, rolling out just a single model is an undertaking that has bankrupted many contenders, including DeLorean and Fisker Automotive. And even electric-vehicle market leader Tesla started off with just one car. But starting this summer Rivian plans to pump out its debut battery-powered pickup, SUV and van in the space of a few months.

“Getting off the ground alone is a big deal for an EV startup, but Rivian takes on the added complication of having three models come out in the same year,” said Sam Fiorani, vice president of global vehicle forecasting for researcher AutoForecast Solutions. “How many American automotive companies have started since World War II and been successful? It’s a list of one -- Tesla.”

The CEO’s ambition surpasses what Elon Musk accomplished with Tesla, which started with the low-volume Roadster before slowly ramping up output and expanding its lineup. That Palo Alto, California-based company, founded in 2003 and currently worth about $550 billion, didn’t surpass sales of 40,000 vehicles until 2015 and took another three years to top 300,000 in annual vehicle sales.

The pickup is set to launch in June, followed by the SUV in August and the Amazon van sometime in the fall. The three models are all built atop the same electric “skateboard” platform that is assembled on two dedicated lines. Production then branches off further and vehicles are fitted with what engineers call “top hats” distinguishing them as pickups, SUVs or delivery vans.

Embracing Investors’ Expertise

Tesla repeatedly missed production deadlines when it first attempted to mass produce its bestselling Model 3 sedan. CEO Musk underscored that difficulty in a March 4 tweet about the challenges confronting newer carmakers: “Prototypes are easy, production is hard & being cash flow positive is excruciating.”

But unlike that EV kingpin -- who disdained traditional automotive orthodoxy and learned lessons the hard way -- Rivian has embraced outside expertise in the form of two of its key investors: Amazon and Ford.

Amazon provided assistance last spring to help restore activity at the automaker’s plant after the pandemic temporarily shut down operations. It has ordered 100,000 vans from Rivian over the span of a decade, including 10,000 by late 2022.

Ford provided early advice on manufacturing and engineering. A Ford subsidiary helped with the huge dies that stamp out the body panels of Rivian’s models, said the people knowledgeable about the companies.

Representatives for Amazon and Ford had no comment.

Rivian was planning what would have been a fourth vehicle -- an upscale EV to be co-developed with Ford for its Lincoln luxury line -- but scrapped those plans in April, blaming the pandemic. Ford says it still intends to build a model with Rivian, but when and what type of vehicle remains undecided.

“They’ve got their hands full,” Hau Thai-Tang, Ford’s product development chief, said in a recent interview. “We’ve got to let them get through that first.”

IIRC, Tesla hired away a guy from Audi who was an expert in rolling out vehicles in volume (he was there for the "new" A3/S3/Q3 project)

 

[U100]

In support of this article, good interview here:

I had to quit watching this interview halfway through because I found myself getting mad at how many times the Rivian employee said the word “customer “ - I am your customer, I’ve identified myself for you by giving you $1,000!! I therefore made your job easier, so give me some info about your vehicles!!

 

[DucRider]

This is why I am dumbfounded that Rivian has not yet started the order "finalizing" phase. Lots of talk about that happening around 30-days ahead of a customer's build/delivery. That seems ridiculously short-notice for a "gate" decision to purchase or not (or delay with non-L.E.) and how that impacts production planning. I would think they'd want good clarity to firm up production plans with at least 45-60 days notice. Heck I would have said 90-days if it wasn't already that time now.

Only a handful are likely in the 90 day window at this point. It's not like all LE will roll out in June. The first run may be LG with Forrest Edge interior (or whatever). If that's not what you configured, you move down the queue.

They have also promised the ability to test drive before the order finalization is required.

That part is non-negotiable for us. If it means delaying delivery, that's what it means. They may have plenty of takers willing to purchase sight unseen for the number of LE vehicles they intend to produce. I'm not one of them.

 

[kanundrum]

That part is non-negotiable for us. If it means delaying delivery, that's what it means. They may have plenty of takers willing to purchase sight unseen for the number of LE vehicles they intend to produce. I'm not one of them.

I do hope they also offer a 7 day guarantee or something along those lines.

 

[LoneStar]

Funny, I was thinking of starting a new (speculative) thread titled something like "Conspiracy-Theory: Secret L.E. Roll-out Customers". It crossed my mind that perhaps Rivian is taking a covert, secretive approach already by contacting a few, select people to be in the first-run batch. They would likely have the oldest reservations and chose the L.E. - maybe even as described being LG painted and FG interior. They would be sworn to secrecy or risk losing their place in line - and sacrificing their first born.


And then I realized that sounded nuts!

 

[Whmorken]

Funny, I was thinking of starting a new (speculative) thread titled something like "Conspiracy-Theory: Secret L.E. Roll-out Customers". It crossed my mind that perhaps Rivian is taking a covert, secretive approach already by contacting a few, select people to be in the first-run batch. They would likely have the oldest reservations and chose the L.E. - maybe even as described being LG painted and FG interior. They would be sworn to secrecy or risk losing their place in line - and sacrificing their first born.


And then I realized that sounded nuts!

Sounded? ?

 

[DB-EV]

Absolutely. I think that number will be at least 20%, & likely higher due to 2 main factors: 1) the CyberTruck and other forthcoming EV "competition", & 2) COVID financial strain. My guess is closer to 30% attrition, but I think that will be less for the earliest of preorders (very early adopters).

In the unauthorized bio about Musk, they discussed how high the cancellation rate was for Tesla's first mass car, the S. I don't remember, but it was pretty high, to the point engineers and all were on hands to call in customers to lock in reservations.

Given that a pandemic has hit, my guess is that Rivian will see a significant number of LE holders pass. I think it would be par for the course without a pandemic.

I love what Rivian represents, and separate from the economic side, I am getting fairly annoyed at the lack of information. For the first time, I am thinking it is plausible that I could cancel my reservation just from an information perspective. Of course, there is no real reason to cancel now, given the refundable order.

 

[Gshenderson]

In the unauthorized bio about Musk, they discussed how high the cancellation rate was for Tesla's first mass car, the S. I don't remember, but it was pretty high, to the point engineers and all were on hands to call in customers to lock in reservations.

Given that a pandemic has hit, my guess is that Rivian will see a significant number of LE holders pass. I think it would be par for the course without a pandemic.

I love what Rivian represents, and separate from the economic side, I am getting fairly annoyed at the lack of information. For the first time, I am thinking it is plausible that I could cancel my reservation just from an information perspective. Of course, there is no real reason to cancel now, given the refundable order.

I’m not sure what % of Rivian reservation holders will elect to cancel, but comparing it to the Model S launch likely isn’t a good comparison. At the time there was no charging infrastructure meaning people were buying a $100,000 toy that was not capable of doing any road trips. In addition, there were serious doubts as to whether Tesla would even make it as a company. Rivian has the advantage of Tesla, Bolt, Leaf etc plowing the ground and getting charging infrastructure built. Combine that with their solid financial backing and the clarity of EV’s being the future, and I think the risks are greatly reduced now vs. then and we’ll see much higher conversion rates with Rivian. Rivian’s risks are more competitive in my opinion. If they get delayed getting the trucks delivered, then they lose their early mover advantage and risk people going to other brands bringing similar products to market.

 

[DB-EV]

I’m not sure what % of Rivian reservation holders will elect to cancel, but comparing it to the Model S launch likely isn’t a good comparison. At the time there was no charging infrastructure meaning people were buying a $100,000 toy that was not capable of doing any road trips. In addition, there were serious doubts as to whether Tesla would even make it as a company. Rivian has the advantage of Tesla, Bolt, Leaf etc plowing the ground and getting charging infrastructure built. Combine that with their solid financial backing and the clarity of EV’s being the future, and I think the risks are greatly reduced now vs. then and we’ll see much higher conversion rates with Rivian. Rivian’s risks are more competitive in my opinion. If they get delayed getting the trucks delivered, then they lose their early mover advantage and risk people going to other brands bringing similar products to market.

I agree with much of this. Tesla is far from a good analogy - indeed the facts I cited would never apply to Rivian in a similar situation in part because of the capital they have on their balance sheet (all as you point out).

The general point is that cancellations can get surprisingly high. I would handicap it at higher than we are expecting collectively.

That said, because demand for the product far outstrips the current reservation holders (recall not all reservation holders can even get LE and some early holders don't want LE), I don't think cancellations will impact Rivian's business plan, and I certainly don't anticipate that our next CS rep will be an engineer!

 

[Sully151]

I’m not planning on backing out of my reservation, but I might back out of Launch Edition if I don’t get to drive the damn thing, see the colors, and get some questions answered.

 

[Trandall]

Funny, I was thinking of starting a new (speculative) thread titled something like "Conspiracy-Theory: Secret L.E. Roll-out Customers". It crossed my mind that perhaps Rivian is taking a covert, secretive approach already by contacting a few, select people to be in the first-run batch. They would likely have the oldest reservations and chose the L.E. - maybe even as described being LG painted and FG interior. They would be sworn to secrecy or risk losing their place in line - and sacrificing their first born.


And then I realized that sounded nuts!

This may not be entirely nuts. Considering there could easily be 100+ employees that are very early LE preorder holders Rivian could fill out all June deliveries with employee delivery. This would gain them an extra month before home deliveries started to non-employee preorder holders. Then by September when production hits 600 units/week (hypothetical) open up to factory pick up to ease delivery logistics.
I still think designing the BEV is the easy part. Rivian has been engineering BEV with (X) number of parts for a decade and engineering/ building a factory with (X) times 10,000 parts for half that time. Rivian will face an untold number of challenges and set backs between now and the first customer delivery.

 

[Whmorken]

This may not be entirely nuts. Considering there could easily be 100+ employees that are very early LE preorder holders Rivian could fill out all June deliveries with employee delivery. This would gain them an extra month before home deliveries started to non-employee preorder holders. Then by September when production hits 600 units/week (hypothetical) open up to factory pick up to ease delivery logistics.
I still think designing the BEV is the easy part. Rivian has been engineering BEV with (X) number of parts for a decade and engineering/ building a factory with (X) times 10,000 parts for half that time. Rivian will face an untold number of challenges and set backs between now and the first customer delivery.

Production is tough. However, delaying shipment to customers past the promised June date in order to reward employees would be a PR disaster. Would it not be a breach of trust? Makes no “sense” for Rivian to do that — if they do it.

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