I hope Rivian can eventually target more middle class consumers

Coast2Coast

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How big does Rivian want to be? The median price for a new car today is almost 38 grand, but that's for mass market models, like Toyotas, F-150s and Rams. That's not the market Rivian wants to target and compete in.

Think Mercedes, BMW, Audi, Lexus instead. I haven't found average price figures for luxury vehicles but at a minimum, it will be $10K more. More likely $15K. So, let's say $38K + $15K = $63K.

Downsizing the R1S & R1T saves $3-5K on materials, labor; less upscale interior, tires, wheels, audio, etc. and another $2-3K saved; and, the big one - batteries. Either a smaller battery pack or less expensive batteries, the illusive but bound-to-be $100/kWh battery, and either way, you save $5K or more.

In short, take out $10-13K in costs plus an unknown amount for economies of scale, and you're right in the mid-$60K, average, ball park pricing for a luxury vehicle. Mercedes Benz and BMW sell 2 million vehicles a year, so Rivian could easily have years and years of production expansion available and not be demand constrained. However, the big unknown is Chinese vehicle production costs, consumer demand and vehicle mix.

And that's where Rivian overseas expansion plans are pivotal and likely why Rivian is about to raise billions more in capital. Rivian needs to expand beyond N. America while retaining a high end cache - a better performing (4 motors, 4WD, air suspension), better for the environment, more accommodating customer experience, fairly priced and delivered.

This won't be easy to pull off. Tesla is already there, MB, BMW, Audi and Lucid are coming, higher end Chinese models will come, if Toyota (& Lexus) can mass produce solid state batteries, it will be a player. There's a lot of uncertainty ahead, but Rivian appears to be positioning itself to be one of the last luxury BEV players standing.





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jjwolf120

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How big does Rivian want to be? The median price for a new car today is almost 38 grand, but that's for mass market models, like Toyotas, F-150s and Rams. That's not the market Rivian wants to target and compete in.
I would say that is not the market they want to compete in yet. I think they may eventually want to compete in those markets.
 

Coast2Coast

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Yes, @jjwolf120, that's what was said. "The mass market is NOT what Rivian should be targeting." Not now and not likely in the future. That market Renault/PSA, VW and the Chinese will be targeting.

A goal of selling 2 million, high-end vehicles a year is realistic. It's ambitious yet doable. Yet to reach that goal, Rivian would need to build another 7 factories the size of Normal. And another confounding factor is the mix between consumer and commercial vehicles.
 

Grabs10

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I look at R1T as a pickup and what it competes with when you look at power and performance. It is a 700hp+ truck in the end with some amazing off-road specs. The only thing close is the Ram TRX which is as expensive and more expensive similarly equipped as an R1T in most cases even without the tax credit. Granted the R1T is smaller but that makes it more livable daily. I think Rivian could cheapen up the R1T if needed if demand isn’t there. And make it equipped more like a basic equipped truck from a more main stream truck manufacture. Panoramic roof could be eliminated, gear tunnel could be eliminated, frunk as well, a motor or 2. Could even make it RWD pickup only. Remove the air suspension in favor coil type suspension and a few other high end feature items interior wise. You will also have battery cost that will come down. Remove the tonneau cover. The list goes on and on of features that could be eliminate to lower the cost cause even the explorer models at $67500 before any tax credit is equipped as a pretty high end pickup from the major pickup makers.

In the end I think It would be possible to get an R1T and R1S lower in price But I don’t think we will see it for some time as Rivian will sell as many high end models as they can make. Between the vans the pickup and suv backlog Normal will be slammed once they get going Try to play catch up.
 
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I think the gear tunnel is more of an outcome from the overall design as opposed to a high cost option. Yes, the doors, locking come with a cost, but otherwise it's wasted space that was always going to be there. Much like the frunk.
 

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Rivian without 4 motors is quite knee capped and as you said, minimal costs for the motor themselves, and more about the engineering and optimization
I'm going to disagree on this one.
You not only have a motor to consider, but also the ancillary components. Differential, inverter to drive the motor (each motor requires one), wiring, coolant loops, etc. Your talking thousands of dollars in component cost. Cutting that in half would be a significant step in producing a lower cost vehicle, and they've more than hinted that is likely to be the case.
The next consumer vehicles from Rivian will almost certainly be smaller, 2 motor, less powerful vehicles, but will likely be at least close to the same range.
 

Eeyore

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There's been other news with more electric vehicles oustourcing parts to providers (such as Magna). Obviously you lose quality control when you outsource, but there are potential cost savings.
That potential cost savings can easily be eaten up by fluctuating quality of outsourced parts. At least that's what's happened at Boeing and some of the troubles they've had with the 787.
 

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I feel in time they will get some more economical models, but they are now making a premium product for a premium price. They want the customers that wear Patagonia, not the ones that wear Columbia :D

I think the 4 motors is a really cool feature that truly differentiates them. Tesla is going max 3, Hummer is max 3, I've read that the F150 and Silverado EV will be 2, so having that will be really good for the power and off road ability.
 

davrow_R1T

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I feel in time they will get some more economical models, but they are now making a premium product for a premium price. They want the customers that wear Patagonia, not the ones that wear Columbia :D
I wear Kirkland (Costco). Can I still buy one? :giggle:
 

jjwolf120

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wear Kirkland (Costco). Can I still buy one?
I'm sorry we will have to disallow your purchase. And no I'm not currently wearing anything from Costco. No really. Don't question me. :)
 

protamine

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Why?

Trickle down car-enomics is real. Hybrids/EVs had an economy style/substance/connotation until Elon came along. If you want a great product, start expensive and work cheaper. Otherwise you're just KIA who makes great stuff now, but still cant shed the image. And it took 15+ years of making decent stuff before they could sell a car above 50k.

I can tell you as a more typical buyer (I'm buying because I think its cool usable luxury tech) that I would not buy a start up EV for 35k. As crazy as it sounds, it being more expensive makes me feel more comfortable (plus the Ford/Amazon investment).

Most of america (where I live) is not ready for 300 mile EVs. I dont even know if I am.

Eventually it will water down, but they are doing a correct strategy. Get good results at cost, build an image, then work on the 'middle class' model.
 

intimidator

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I've been a fan of Rivian for years now and love both the R1T and R1S. Can't wait to see them hit the road later this year. But sadly, I've reconciled myself that this first generation of Rivian models are beyond my financial means. I know it's a huge cost to create a new company and we've seen with Tesla that you start with the Roadster/Model S/X and then come to market with the more affordable models (Model 3/Y). Rivian has done a fantastic job at targeting a niche market, coming up with a brand, and it's not cheap to bring a new vehicle to market. So I understand, they have costs to pay and it's a huge undertaking.

Will Rivian follow a similar path? I would love to think that Rivian is starting off as Lexus and then the Toyota models eventually come to market.
I've given myself two years to hold onto to my aging Subaru SUV and then plan to switch to electric. I know there's the Lordstown, Ford F-150, VW ID.4 which will be what I can afford and let me sleep at night, but a guy can always dream.

I"m just whining at this point. Take care.
It is a dilemma (cost). Rivians are expensive. Tesla is projecting theirs to be quite a bit less. Maybe $20,000 less.

Overtime, Rivian will get more efficient and presumably be able to lower the cost of their vehicles. That might be 4-5 years from now though.
 

intimidator

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An R1T Max pack "Explore" is $77,500. If you factor in the Federal Tax Credit you are right at your $70K number.
Which may be good value....but for the normal guy or gal, a price point of $50,000 might be where they need to be in order to spring for an EV. And Tesla is close to that with a couple of their models.

Competition, plus experience and scale, will drive prices down in the future. Just not in 2021 or 2022.
 

BGS

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Just sold my F150 in anticipation of buying a Jeep Gladiator. That is, until I found you guys. Currently driving a 19 Mitsubishi Elcipse Cross because they had 0% financing. Also, a couple Harleys in the garage.
An R1T Max pack "Explore" is $77,500. If you factor in the Federal Tax Credit you are right at your $70K number.
The tax credit is just that, a tax credit on your taxable income in that particular year. It is NOT a discount on the price of the vehicle.
 

DucRider

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The tax credit is just that, a tax credit on your taxable income in that particular year. It is NOT a discount on the price of the vehicle.
Indeed, but you can take $7,500 you would have paid to the IRS and apply it towards the cost of the vehicle. In the above example your bank account would be $70K smaller (after you file your taxes or adjust your withholding to account for the credit) than if you had not made the purchase.
This does assume you have at least $7,500 in tax liability, but almost all people considering a vehicle in this price range will. If they don't, the there are various strategies to advance tax liability to the current year to take advantage of the credit (converting traditional IRAs to Roth is one)
 

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