Conference call important information

[riviantogo]

Not certain if folks got a chance to go over the conference call transcript. If not, its worth a read. Before I read it, I'd been hit with the CNBC experts (doom and gloom), Musk comments (more doom and gloom, company gone in 6 quarters) and the WSJ (better to be an ICE company and transition slowly). A year ago, being an ICE company was a liability, since the transition to EV's was going to hit like a tidal wave. Ahem, well, then again, maybe not.

But what I heard from management in the transcript was pretty exciting. They were handling the bad news well. And they were giving us a path to profitability. The stock is not quite priced for liquidation, but it is awfully cheap. Probably too cheap. The specifics are what excited me. Their template of modifying the manufacturing of the Amazon vans and turning them into highly profitable vehicles is going to be replicated. Many parts for R2's are going into the next gen R1's. This reduced part count and improved cost structure is going to get interesting: they are essentially building oversized R2's with nicer finishes, a bigger chassis and battery, a third row, but otherwise a very very similar vehicle. They will have a couple bad quarters and then the numbers will improve significantly as things have ramped. On the R2, once they get to volume on the new R1, then they should race to build R2s in temp facilities. Build them in the parking lot if they have to, but build them. Like the R1, each R2 on the road is an advertising machine.

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[DuoRivians]

Not certain if folks got a chance to go over the conference call transcript. If not, its worth a read. Before I read it, I'd been hit with the CNBC experts (doom and gloom), Musk comments (more doom and gloom, company gone in 6 quarters) and the WSJ (better to be an ICE company and transition slowly). A year ago, being an ICE company was a liability, since the transition to EV's was going to hit like a tidal wave. Ahem, well, then again, maybe not.

But what I heard from management in the transcript was pretty exciting. They were handling the bad news well. And they were giving us a path to profitability. The stock is not quite priced for liquidation, but it is awfully cheap. Probably too cheap. The specifics are what excited me. Their template of modifying the manufacturing of the Amazon vans and turning them into highly profitable vehicles is going to be replicated. Many parts for R2's are going into the next gen R1's. This reduced part count and improved cost structure is going to get interesting: they are essentially building oversized R2's with nicer finishes, a bigger chassis and battery, a third row, but otherwise a very very similar vehicle. They will have a couple bad quarters and then the numbers will improve significantly as things have ramped. On the R2, once they get to volume on the new R1, then they should race to build R2s in temp facilities. Build them in the parking lot if they have to, but build them. Like the R1, each R2 on the road is an advertising machine.

Getting to gross profit in Q4 2024 wasn’t what surprised analysts. In some sense, this was the priced-in expectation already.

In my opinion, what mattered most was a falling demand story that probably won’t rectify itself until 2026 at the earliest when R2 comes out.

Until then, Rivian portrayed max production of 57K vehicles in 2024, of which analysts didn’t seem convinced all would be sold. In 2025, how does the demand story change?

Looming in the background are concerns about capital raise, Georgia plant execution, general EV headwinds.

In short, I don’t think analysts can answer: why invest now versus waiting closer to 2026 to get more info? Is the risk/reward of tying up money in $rivn today worth it between 2024 and 2026?