May 9th Earnings Call Discussion

[NineElectrics]

But wasn't the model 3 one of the reasons Tesla became profitable? Not saying analysts would care but seems like there is some precedent for the volume model to be considered a factor.

The Chinese factory did that, mainly. Tesla isn’t great at profitability when it comes to US factories.

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[Sharpobjects4321]

That reminds me of the old joke about the Smorgasbord Restaurant that loses money on every customer but makes it up in volume.

I'm just not sure how the cost of key components is going to go anywhere but up, putting Rivian in a tough spot when customers are going to be concerned about Rivan surviving.

apparently it is getting cheaper to make them, they believe they can become profitable by 2024 (from the last call) because they are cutting cost in the manufacturing 50% of where they are going to become profitable will come for cheaper components. Claire said that cost cutting doesn't even include battery cost- lithium is diving now so that will also help she said that on the last call also that they weren't factoring that in.

 

[dleewla]

No investor should care about R2 plans until Rivian can make a good profit selling higher-margin vehicles. Until that happens, the very idea of R2 is a complete non-starter.

thats the whole point of the R2, its supposed to be their higher-margin vehicle so doesn't make sense to call that a non-starter.

 

[Nacho Rivian]

First ... welcome to the forum Nacho!

"Too early to focus on profit at this time" ?? That's why Rivian is trading at what it's trading ... nothing else matters (or you get assigned book value, if that). There are too many others in the space for any grace period, in my view. Unfortunately, that ship sailed. With inflation, I'm not remotely sure that Rivian will make a profit on new orders. If so, where does that leave them?

Supply chain issues and inflation should resolve overtime; Fed will make that happen at any cost as long as financial system can endure fairly. Too much money in the market still. Peter Lynch invested in companies where his daughter liked and used rather than focusing on balance sheet. My experience with Rivian including Demo drive was pretty good. I bet on Rivian will do well as long as product quality and customer services are good.

 

[Autolycus]

lithium is diving now so that will also help she said that on the last call also that they weren't factoring that in.

I know one big driver in lithium prices falling is some big investments by Chinese companies. Are prices for Lithium sources outside of China -- more specifically from the US or its free trade partners -- similarly falling? It looks like maybe yes for lithium from Australia and Chile?

Edit to add that lithium prices are still "high", but significantly lower than peak in 2022. It still costs >4x what it did in 2019-early 2021.

 

[jeeden]

I know one big driver in lithium prices falling is some big investments by Chinese companies. Are prices for Lithium sources outside of China -- more specifically from the US or its free trade partners -- similarly falling? It looks like maybe yes for lithium from Australia and Chile?

Edit to add that lithium prices are still "high", but significantly lower than peak in 2022. It still costs >4x what it did in 2019-early 2021.

Speaking of, did anyone see the 60 Minutes the other night on "Lithium Valley?" I don't usually watch the show, but it caught my eye. Very impressive how much they found there (decades worth) and the combination of it with geothermal power for processing. Sounds like Chrysler went way in on hedging with them... although I feel like one of the new compounds like Sodium, etc is likely to unseat lithium as the go-to for batteries within the next few years.

https://www.cbsnews.com/news/califo...-vehicle-battery-needs-60-minutes-2023-05-07/

 

[NY_Rob]

^ IIRC, GM has invested big time in the Salton Sea Lithium extraction project as well. With China locking up so much of the world supply for their own use (and resale at huge markups) the other battery producers may be forced to go domestic for their Lithium if they want to compete w/China produced automobiles.

 

[Biturbowned]

Very tempted to take profits because I’m sure it will drop after hours, but in for a penny…

 

[DuoRivians]

1Q REV. $661M, EST. $660.3M
1Q CASH & CASH EQUIVALENTS $11.24B, EST. $10.86B [MOST IMPORTANT IMO]
STILL SEES FY PRODUCTION 50,000 VEHICLES, EST. 51,462
STILL SEES FY ADJ. EBITDA LOSS $4.30B, EST. LOSS $4.38B

 

[Biturbowned]

Great job Rivian!

 

[1T2022]

 

[junkanoo]

For those hoping for increased volume above the 50,000 target, that's not happening as CNBC reports that production is still part-constrained.

CNBC will be interviewing RJ at the plant tomorrow at 7:30 a.m.

 

[Sharpobjects4321]

so no surprise on earnings- they are just getting better at controlling their expenses- only (1.25) loss per share. I think next quarter we will see some benefit in the new battery/motor EDV- hopefully we can get the production up to 12-14k with 11-12k deliveries with more of those going to post 3/1 peeps. get that revenue over a Billion a Q and drop the loss per share under a dollar.

 

[Redline]

I get the feeling they're sandbagging the 50k number.

 

[junkanoo]

1Q REV. $661M, EST. $660.3M
1Q CASH & CASH EQUIVALENTS $11.24B, EST. $10.86B [MOST IMPORTANT IMO]
STILL SEES FY PRODUCTION 50,000 VEHICLES, EST. 51,462
STILL SEES FY ADJ. EBITDA LOSS $4.30B, EST. LOSS $4.38B

"Rivian quarterly revenue beats estimates on higher-priced EV sales
May 9 (Reuters) - Rivian Automotive Inc(RIVN) beat Wall Street estimates for quarterly revenue on Tuesday as the electric-vehicle maker sold more higher-priced vehicles during the first three months of this year.
The company expects production ramp up of its in-house Enduro powertrains to help offset parts supply issues in the second half of the year, enabling it to meet its smaller-than-estimated target of manufacturing 50,000 units.
The company did not provide details of its pre-orders at the end of the quarter amid demand concerns aggravated by higher borrowing costs and industry leader Tesla's aggressive price cuts.
Tesla Inc (TSLA) has cut prices globally this year as part of its recession playbook to increase sales volumes, pressuring smaller EV players that started deliveries just about a year ago.
Amazon-backed Rivian said in March it would sell $1.3 billion in convertible green bonds due in 2029 to shore up its cash balance. Analysts view it as a temporary fix.
Revenue for the quarter ended March 31 stood at $661 million, compared with Wall Street estimates of $652.1 million, according to Refinitiv data.
The company reported a net loss of $1.35 billion for the first three months of the year, compared with a loss of $1.59 billion a year earlier.

Cash and cash equivalents at the end of the first quarter were $11.24 billion, compared with $11.57 billion, in the preceding three-month period."

When they lose $1.35 billion in Q1, yet cash remains largely unchanged at 11.24 billion ... I'd want to know why. Did they go into even more debt to pull that off, reduce inventories or what?

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