May 9th Earnings Call Discussion

[Redline]

Just listening to this call vs the others I've been on, this feels like a true pivot point for the company.

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[DuoRivians]

Just listening to this call vs the others I've been on, this feels like a true pivot point for the company.

Yeah agree.

 

[dleewla]

gross profit loss per vehicle cut in half between Q42022 and Q12023 due to mainly price of each unit sold. i dont know if this is good or not. does this mean each vehicle being sold is still being sold at a profit loss? how is that good if they are selling these units at the higher prices?

 

[SaucyMonk]

gross profit loss per vehicle cut in half between Q42022 and Q12023 due to mainly price of each unit sold. i dont know if this is good or not. does this mean each vehicle being sold is still being sold at a profit loss? how is that good if they are selling these units at the higher prices?

Factories are only profitable when they're operating near their capacity in most cases. Right now they are running at roughly half capacity while they scale, which means there's a lot of overhead causing a negative margin on the product. The gap this quarter was closed a bit since the average amount of premium features (paint, off-road packages, etc.) increased per truck, and those have higher profit margins helping to offset the factory overhead. Net/net, this will help support them until they get the plant running at full tilt.

 

[stumptown85]

gross profit loss per vehicle cut in half between Q42022 and Q12023 due to mainly price of each unit sold. i dont know if this is good or not. does this mean each vehicle being sold is still being sold at a profit loss? how is that good if they are selling these units at the higher prices?

That’s exactly what they are saying. They have been pretty clear they had to sign unfavorable supply deals because they had zero pricing power and they are likely intentionally overpaying to secure supply. Those deals are being renegotiated to bring part price down now that they do have as well as bringing key components in house(Enduro and Audio). After they get the BOM cost right sided, then there are fixed overheads like R&D, Eng, Facilities that need to be diluted by volume(R2). That’s why they are saying gross profit next year, but they likely won’t be net profit until a year or two after R2 ramp IMO. They have a lot of work to do, but if they can demonstrate they can execute and deliver on results, they don’t need to turn a profit for years. Tesla raised so much money via new stock issuance…Rivian hasn’t even touched that yet and will want to wait until the price rebounds a bit, but mark my words, they will do it more than once.

 

[AllInev]

Just listening to this call vs the others I've been on, this feels like a true pivot point for the company.

Complete agree. Unfortunately, the people buying/selling stocks don't seem to be on the same page. It's a little disappointing that the stock today (5/11/23) is back to the pre-Q1 Earnings release.

There's apparently still a lot of skepticism in the investment community about Rivan's ability to execute on its plan. I still plan to hold my piddly share count for a few more years.

 

[DuoRivians]

Complete agree. Unfortunately, the people buying/selling stocks don't seem to be on the same page. It's a little disappointing that the stock today (5/11/23) is back to the pre-Q1 Earnings release.

There's apparently still a lot of skepticism in the investment community about Rivan's ability to execute on its plan. I still plan to hold my piddly share count for a few more years.

It was a solid earnings report. Team seems fired up and the numbers are trending the right way.

I think Polestar's report ($psny -12.5% today) spooked the markets and caused the entire startup EV sector to sell off.

I firmly believe Rivian's long term is sound.

 

[Guy]

I will be interested in what the base R2 is like since that will be $20-25k cheaper (assuming 40ish now is more like $50k in 2026).

Same power train, so no savings there on motors or battery. Obviously savings from supplier renegotiation, smaller size so less metal etc, less sophisticated suspension, no glass roof, cheaper seats with no heating/ventilation, less speakers.

I wonder if that all adds up to the difference in price.

 

[Biturbowned]

Complete agree. Unfortunately, the people buying/selling stocks don't seem to be on the same page. It's a little disappointing that the stock today (5/11/23) is back to the pre-Q1 Earnings release.

There's apparently still a lot of skepticism in the investment community about Rivan's ability to execute on its plan. I still plan to hold my piddly share count for a few more years.

Right, the market pricing right now doesn’t make sense to me, especially after the earnings call. I bought more at what I believe to be a healthy discount.

 

[kurtlikevonnegut]

I will be interested in what the base R2 is like since that will be $20-25k cheaper (assuming 40ish now is more like $50k in 2026).

Same power train, so no savings there on motors or battery. Obviously savings from supplier renegotiation, smaller size so less metal etc, less sophisticated suspension, no glass roof, cheaper seats with no heating/ventilation, less speakers.

I wonder if that all adds up to the difference in price.

I think it's very possible if not likely that the entry level R2 will have a battery pack smaller than the smallest R1 pack. Probably something in the 70-85kwh range. Assuming it's also LiFePo that would be much less expensive than the current Large pack.

 

[Guy]

I think it's very possible if not likely that the entry level R2 will have a battery pack smaller than the smallest R1 pack. Probably something in the 70-85kwh range. Assuming it's also LiFePo that would be much less expensive than the current Large pack.

The smallest for the R1 will be the standard pack at 105KW, now if they go smaller they can save some money but the range, even in a smaller vehicle will go down. Not sure they want to go much below 250 miles.

 

[kurtlikevonnegut]

The smallest for the R1 will be the standard pack at 105KW, now if they go smaller they can save some money but the range, even in a smaller vehicle will go down. Not sure they want to go much below 250 miles.

The R2, especially if there is a from factor thats a crossover, will likely be much more like a MY than a R1, so Id expect the entry level battery and range to be similar to that.

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