Class action suit against Rivian

[DuoRivians]

This thread proves that ignore is insufficient. We need a proper block feature—same few people over and over again.

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[Zoidz]

Tesla is the only EV maker (other than ones in direct financial trouble like Fisker) that has seen a significant slowdown in actual sales. Ford, GM, Hyundai/Kia, Volvo/Polestar, VW - they've all seen continued growth. The growth just isn't as fast as they had previously predicted.

I literally said exactly what you said. OVER ESTIMATED DEMAND is the same thing as PREDICTED DEMAND.

“ALL EV companies over estimated demand and are suffering the consequences of a drop in demand,”

 

[CharonPDX]

It's likely that Tesla will sell more vehicles in 2024 than they did in 2023. It's never good to look at sales on too granular of a basis. One quarter does not a year make.

Tell that to investors.

 

[RivianRunner]

Tell that to investors.

I am an investor.

 

[RivianRunner]

It seems that most people on this thread don't have a clue on how markets and investment works. Everyone is forgetting that rivian is loosing money on every vehicle that they sale. That difference is being financed by investors like myself who at one point owned 2500 shares. As management keeps making decisions based on RJ personal preferences and not based on the needs of the company, investors are selling out and the stock price falls. When making such decisions, management is breaking its fiduciary responsibility towards it's investors.
I don't see Rivian surviving through the end of 2025.

There are large financial interests that want Rivian to fail, and Rivian will need more funding to bring their next new models into high volume production. So Rivian is likely to experience a lot of negative FUD to try to make it difficult to raise money. It could get pretty turbulent from a control of the company perspective, and all that entails. But short of getting squashed by outside interests, some of the same interests, BTW, that are constantly trying to undermine Tesla, I think it likely that Rivian will be able to raise more money and ramp their new model(s) to the highest production to date, by a big margin.

If the economy is constantly improving, they may even be able to be breakeven/profitable on a gross margin basis. But that's not profitable on a net basis, and they should already be profitable on a gross basis, this was their biggest "mistake", not focusing like a laser on keeping cost of production lower than it has been.

I really don't see Rivian failing by 2025, and I don't see them hitting the $40,000/vehicle price point in the next two years either. They will have to make a smaller, but still nice SUV, with an ASP of $55-60,000 and hope the economy is strong enough to support volume sales and their production is efficient enough, and the products have low enough warranty costs. If interest rates rise substantially again, which is not widely expected, it would be bad for Rivian (and to a much lesser degree, Tesla). Automaking is a difficult business at any scale, made more difficult by the fact that auto sales are cyclical with the economy.

 

[Noah Arc]

There are large financial interests that want Rivian to fail, and Rivian will need more funding to bring their next new models into high volume production. So Rivian is likely to experience a lot of negative FUD to try to make it difficult to raise money. It could get pretty turbulent from a control of the company perspective, and all that entails. But short of getting squashed by outside interests, some of the same interests, BTW, that are constantly trying to undermine Tesla, I think it likely that Rivian will be able to raise more money and ramp their new model(s) to the highest production to date, by a big margin.

If the economy is constantly improving, they may even be able to be breakeven/profitable on a gross margin basis. But that's not profitable on a net basis, and they should already be profitable on a gross basis, this was their biggest "mistake", not focusing like a laser on keeping cost of production lower than it has been.

I really don't see Rivian failing by 2025, and I don't see them hitting the $40,000/vehicle price point in the next two years either. They will have to make a smaller, but still nice SUV, with an ASP of $55-60,000 and hope the economy is strong enough to support volume sales and their production is efficient enough, and the products have low enough warranty costs. If interest rates rise substantially again, which is not widely expected, it would be bad for Rivian (and to a much lesser degree, Tesla). Automaking is a difficult business at any scale, made more difficult by the fact that auto sales are cyclical with the economy.

I would like to be wrong but I don't see the market for EV improving without HUGE investment in supper charging stations. considering the increased competition and the likelihood for oil prices to fall with a new administration, the head winds are only going to be stronger.

 

[RivianRunner]

I would like to be wrong but I don't see the market for EV improving without HUGE investment in supper charging stations. considering the increased competition and the likelihood for oil prices to fall with a new administration, the head winds are only going to be stronger.

All it takes for the EV market to grow massively larger is to offer consumers more value for their hard-earned dollars. This is done by making better, more durable vehicles and offering them at lower prices.

A car is the second largest purchase (after a house) for most new car buyers, and these buyers look very closely at how much vehicle they can get for their money. With high interest rates, new car buyers have to pay a lot more for the same priced car (80% of new car sales are via a new car loan).

Fortunately, some EV makers have room to lower prices while remaining profitable. Even those who don't, can refine production to make cars cost less to build. ICE car manufacturers have more difficulty doing this because the technology is more mature. Batteries and power electronics are still falling in price, and thus offering increasing value to consumers as prices continue to fall.

There is no edict saying a new administration will happen. And if it does, why do you think a new administration will bring lower gas prices? The Biden administration has been very friendly to the domestic oil and gas industry. Gas prices are more likely to go up than down. But EV's will sell just fine even if gas stays cheap. Because a lot of people buy EV's simply because they are better cars, not because they will save so much on gas.

EV market share growth has only just begun.

 

[Noah Arc]

All it takes for the EV market to grow massively larger is to offer consumers more value for their hard-earned dollars. This is done by making better, more durable vehicles and offering them at lower prices.

A car is the second largest purchase (after a house) for most new car buyers, and these buyers look very closely at how much vehicle they can get for their money. With high interest rates, new car buyers have to pay a lot more for the same priced car (80% of new car sales are via a new car loan).

Fortunately, some EV makers have room to lower prices while remaining profitable. Even those who don't, can refine production to make cars cost less to build. ICE car manufacturers have more difficulty doing this because the technology is more mature. Batteries and power electronics are still falling in price, and thus offering increasing value to consumers as prices continue to fall.

There is no edict saying a new administration will happen. And if it does, why do you think a new administration will bring lower gas prices? The Biden administration has been very friendly to the domestic oil and gas industry. Gas prices are more likely to go up than down. But EV's will sell just fine even if gas stays cheap. Because a lot of people buy EV's simply because they are better cars, not because they will save so much on gas.

EV market share growth has only just begun.

I do not agree with your analysis. Non of it is based on facts.
"The Biden admin has been very friendly to the oil industry" ARE YOU KIDDING ME? he is THE WORST. you need to change you news info outlet.
I do agree that EV are better and yet, people will not buy them until charging infrastructure is robust! No American EV maker has room to lower prices as they ALL loosing money on EVERY vehicle they sell. Only the Chinese manufacturers can lower prices due to gov subsidies.
Finally, read the EV sales report, it slowing down significantly.

 

[Dave Cundiff]

I do not agree with your analysis. Non of it is based on facts.
"The Biden admin has been very friendly to the oil industry" ARE YOU KIDDING ME? he is THE WORST. you need to change you news info outlet.
I do agree that EV are better and yet, people will not buy them until charging infrastructure is robust! No American EV maker has room to lower prices as they ALL loosing money on EVERY vehicle they sell. Only the Chinese manufacturers can lower prices due to gov subsidies.
Finally, read the EV sales report, it slowing down significantly.

Hi, @Noah Arc -- thanks for participating!

A few factual quibbles:

***

First, Biden and the oil industry: My take is that this is complicated.

(1) Most factual analyses show U.S. oil and gas production increased significantly during the Biden administration compared to prior records in 2019. Source: https://www.forbes.com/sites/rrapie...ad-of-last-years-record-pace/?sh=12dfc49260ac . Not a left-wing publication!

(2) The increase in production has required the approval of leases and permits that most environmentalists strongly opposed. Many of my "environmentalist" friends are very unhappy at President Biden because of these decisions. At the same time, many of my "conservative" friends didn't think U.S. oil and gas production increased nearly enough! Since they don't believe the science linking global climate disruption to CO2 emissions, and/or they don't think climate disruption is a real issue until it obviously affects them personally, they advocate "drill, baby, drill."

(3) Consumer energy prices have increased, due (I believe) to (A) general inflation; (B) elimination of energy export restrictions, allowing more to be exported when more is extracted; (C) increased demand for gasoline with the easing of pandemic restrictions; (D) decreased availability of Russian oil and gas due to war and international sanctions; and (E) institution, in some locations, of measures to tax fossil fuels either directly or via a "carbon emissions market."

None of these five factors is directly under the control of the U.S. President or any state governor. #A is mostly about business/consumer behaviors affected by the appointed Federal Reserve, responding partly to Federal budget deficits decided by Congress. #B is from past legislative action, if I understand correctly. #C is about all of us as consumers. #D was thrust upon the entire Free World when Russia invaded Ukraine. And #E is mostly about state legislation, though governors implement that legislation. I would argue that the overall effect of #E is a net benefit, because it discourages carbon emissions and increases the incentives for renewable energy.

(4) My impression is that the oil and gas industries are most profitable when consumer energy prices are high, and least profitable when consumer energy prices are relatively low. This is what I think @RivianRunner was primarily referring to.

***

Second, it's not accurate to say that "ALL" U.S. EV makers are losing money on each vehicle.

My understanding is that Tesla, which makes only electric vehicles, is making positive gross profit and positive net profit from vehicle manufacturing in the USA.

Many legacy automakers are producing energy-efficient vehicles (with EVs the most energy-efficient) in order to meet fleet-wide energy efficiency standards. If losing $5,000 (hypothetically) on each EV sale allows them to make $10,000 from a gas-guzzling truck, are they really losing money making their EVs? It all depends on your definitions!

***

Third, EV sales in the USA aren't slowing, they are increasing in raw numbers. However, they are increasing much more slowly than in previous years. EVs' share (percentage) of all vehicle sales decreased last quarter, and the significance of this isn't yet clear.

First quarter 2024 (2024Q1) EV sales in the USA are about 2.4% higher than first quarter 2023 (269,132 vs. 262,776, per https://www.coxautoinc.com/wp-conte...y-Blue-Book-Electric-Vehicle-Sales-Report.pdf).

Total light vehicle sales rose 5.6% year over year from 2023Q1 to 2024Q1 (https://finance.yahoo.com/news/us-v...s87-omLYQWpKHA2NudqXa1vcbNSqkd9_MTSpt2bQaZN_Q). So the EV share decreased slightly.

***

I look forward to further discussion of facts and opinions!

 

[Zoidz]

Hi, @Noah Arc -- thanks for participating!

A few factual quibbles:

***

First, Biden and the oil industry: My take is that this is complicated.

(1) Most factual analyses show U.S. oil and gas production increased significantly during the Biden administration compared to prior records in 2019. Source: https://www.forbes.com/sites/rrapie...ad-of-last-years-record-pace/?sh=12dfc49260ac . Not a left-wing publication!

(2) The increase in production has required the approval of leases and permits that most environmentalists strongly opposed. Many of my "environmentalist" friends are very unhappy at President Biden because of these decisions. At the same time, many of my "conservative" friends didn't think U.S. oil and gas production increased nearly enough! Since they don't believe the science linking global climate disruption to CO2 emissions, and/or they don't think climate disruption is a real issue until it obviously affects them personally, they advocate "drill, baby, drill."

(3) Consumer energy prices have increased, due (I believe) to (A) general inflation; (B) elimination of energy export restrictions, allowing more to be exported when more is extracted; (C) increased demand for gasoline with the easing of pandemic restrictions; (D) decreased availability of Russian oil and gas due to war and international sanctions; and (E) institution, in some locations, of measures to tax fossil fuels either directly or via a "carbon emissions market."

None of these five factors is directly under the control of the U.S. President or any state governor. #A is mostly about business/consumer behaviors affected by the appointed Federal Reserve, responding partly to Federal budget deficits decided by Congress. #B is from past legislative action, if I understand correctly. #C is about all of us as consumers. #D was thrust upon the entire Free World when Russia invaded Ukraine. And #E is mostly about state legislation, though governors implement that legislation. I would argue that the overall effect of #E is a net benefit, because it discourages carbon emissions and increases the incentives for renewable energy.

(4) My impression is that the oil and gas industries are most profitable when consumer energy prices are high, and least profitable when consumer energy prices are relatively low. This is what I think @RivianRunner was primarily referring to.

***

Second, it's not accurate to say that "ALL" U.S. EV makers are losing money on each vehicle.

My understanding is that Tesla, which makes only electric vehicles, is making positive gross profit and positive net profit from vehicle manufacturing in the USA.

Many legacy automakers are producing energy-efficient vehicles (with EVs the most energy-efficient) in order to meet fleet-wide energy efficiency standards. If losing $5,000 (hypothetically) on each EV sale allows them to make $10,000 from a gas-guzzling truck, are they really losing money making their EVs? It all depends on your definitions!

***

Third, EV sales in the USA aren't slowing, they are increasing in raw numbers. However, they are increasing much more slowly than in previous years. EVs' share (percentage) of all vehicle sales decreased last quarter, and the significance of this isn't yet clear.

First quarter 2024 (2024Q1) EV sales in the USA are about 2.4% higher than first quarter 2023 (269,132 vs. 262,776, per https://www.coxautoinc.com/wp-conte...y-Blue-Book-Electric-Vehicle-Sales-Report.pdf).

Total light vehicle sales rose 5.6% year over year from 2023Q1 to 2024Q1 (https://finance.yahoo.com/news/us-v...s87-omLYQWpKHA2NudqXa1vcbNSqkd9_MTSpt2bQaZN_Q). So the EV share decreased slightly.

***

I look forward to further discussion of facts and opinions!

Agree. Every time I hear a comment that "President X's Administration is responsible for lower/higher oil/gas/electric prices" all it tells me is that the person making that claim knows nothing about how energy markets work.

 

[Noah Arc]

Hi, @Noah Arc -- thanks for participating!

A few factual quibbles:

***

First, Biden and the oil industry: My take is that this is complicated.

(1) Most factual analyses show U.S. oil and gas production increased significantly during the Biden administration compared to prior records in 2019. Source: https://www.forbes.com/sites/rrapie...ad-of-last-years-record-pace/?sh=12dfc49260ac . Not a left-wing publication!

(2) The increase in production has required the approval of leases and permits that most environmentalists strongly opposed. Many of my "environmentalist" friends are very unhappy at President Biden because of these decisions. At the same time, many of my "conservative" friends didn't think U.S. oil and gas production increased nearly enough! Since they don't believe the science linking global climate disruption to CO2 emissions, and/or they don't think climate disruption is a real issue until it obviously affects them personally, they advocate "drill, baby, drill."

(3) Consumer energy prices have increased, due (I believe) to (A) general inflation; (B) elimination of energy export restrictions, allowing more to be exported when more is extracted; (C) increased demand for gasoline with the easing of pandemic restrictions; (D) decreased availability of Russian oil and gas due to war and international sanctions; and (E) institution, in some locations, of measures to tax fossil fuels either directly or via a "carbon emissions market."

None of these five factors is directly under the control of the U.S. President or any state governor. #A is mostly about business/consumer behaviors affected by the appointed Federal Reserve, responding partly to Federal budget deficits decided by Congress. #B is from past legislative action, if I understand correctly. #C is about all of us as consumers. #D was thrust upon the entire Free World when Russia invaded Ukraine. And #E is mostly about state legislation, though governors implement that legislation. I would argue that the overall effect of #E is a net benefit, because it discourages carbon emissions and increases the incentives for renewable energy.

(4) My impression is that the oil and gas industries are most profitable when consumer energy prices are high, and least profitable when consumer energy prices are relatively low. This is what I think @RivianRunner was primarily referring to.

***

Second, it's not accurate to say that "ALL" U.S. EV makers are losing money on each vehicle.

My understanding is that Tesla, which makes only electric vehicles, is making positive gross profit and positive net profit from vehicle manufacturing in the USA.

Many legacy automakers are producing energy-efficient vehicles (with EVs the most energy-efficient) in order to meet fleet-wide energy efficiency standards. If losing $5,000 (hypothetically) on each EV sale allows them to make $10,000 from a gas-guzzling truck, are they really losing money making their EVs? It all depends on your definitions!

***

Third, EV sales in the USA aren't slowing, they are increasing in raw numbers. However, they are increasing much more slowly than in previous years. EVs' share (percentage) of all vehicle sales decreased last quarter, and the significance of this isn't yet clear.

First quarter 2024 (2024Q1) EV sales in the USA are about 2.4% higher than first quarter 2023 (269,132 vs. 262,776, per https://www.coxautoinc.com/wp-conte...y-Blue-Book-Electric-Vehicle-Sales-Report.pdf).

Total light vehicle sales rose 5.6% year over year from 2023Q1 to 2024Q1 (https://finance.yahoo.com/news/us-v...s87-omLYQWpKHA2NudqXa1vcbNSqkd9_MTSpt2bQaZN_Q). So the EV share decreased slightly.

***

I look forward to further discussion of facts and opinions!

Thanks for your input.
I still think that Rivian does not show strong management and clear direction to profitability. As competition from cheap imports will increase and without investments in infrastructure EV's manufacturers will struggle to stay afloat.

 

[Dave Cundiff]

Thanks, @Noah Arc !

Our family's main investment in Rivian is in the vehicles -- 2023 R1S and a newly acquired 2023 R1T. We own a small amount of stock, for which we paid much less than we paid for the vehicles.

Both vehicle purchase and stock purchase indicate (1) our hope that Rivian will succeed, and (2) our confidence that Rivian has at least a solid chance of success.

If we want a better life, and a better world, we have to take at least some risks to get there. My wife and I decided that, for us, Rivian Automotive is a reasonable and prudent risk.

Best wishes!

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