MSNBC Article: Rivian Falls Apart

[Count Orlok]

LOL, that didn't take long
OP literally called out it was an MSNBC article. I'm not going to read it because it is clickbait and trash as most of the articles bashing Rivian tend to be.

it is clickbait and trash for sure but not for the reason you assume.

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[johstacy]

My mom asked if I’d seen this MSNBC article Rivian Falls Apart, which I hadn’t. I’ll be as kind as I can be and simply write that it seems heavily biased to me. Did anyone else see this and have any thoughts?

Well reading this thread is quite interesting even the political aspects of it (I am an Elon fan) however all I got to say Is I just gave Rivian Almost $100,000 last month for my R1T and I am pretty sure 1000 other people did to.... that's no small chump change I think Rivian will be just fine

 

[Thud]

Yes it’s going to be interesting if Tesla can compete with legacy auto now that there is competition. He’s not going to be able to scalp people with bare bones cars for much longer, at least not at current price points. When the big guys start making cars with more of the stuff people want for the same price Tesla is going to have to either add value or lower the price.

Legacy auto has a big leg up on those creature comforts over Tesla because as you said Tesla has not really made much of them yet. I think the Rivian approach is smarter, they are going for the tech AND the quality and creature comforts.

Rivian might not be doing either of those two things as good as the champs in either of them, but going forward as the market expands being good at both is going to be the bar that all cars are measured against.

Rivian is in a good spot so far IMO. They are better than legacy auto with tech, and better with creature comforts than Tesla which puts them in a decent spot to sustain business into the future so long as they keep improving both.

At the risk of stating the obvious... Rivian is probably just going to follow Tesla's roadmap. Tesla was never profitable when they only produced the Model S/X. Not until they went through "production hell" with the Model 3 did they finally turn a profit.

It seems reasonable that Rivian won't be profitable until their less expensive mass market R2 series. R1T/S exist to establish the brand identity and get Rivian a reputation for making excellent and desirable products. And they will face the same "production hell" with R2, but maybe with some lessons learned from Tesla, whatever those may be. Hopefully Rivian won't need to compromise too much for the sake of simplicity with lower price products.

 

[Gator42]

It's one thing to be on the "other team" politically, but something else entirely to be intentionally divisive and go out of one's way to insult a large part of the core customer base while elevating disinformation that singles out individuals putting them at risk of harassment or worse. All in the name of driving up Twitter platform usage.
But anyway... I digress

You hit lots of the buzz words but that could have been written by our MSNBC ‘journalist’

Musk has demonstrated Twitter was censoring unfavored political candidates and points of view- Musk wants to see the platform open to different points if view…

(Here come the ‘no politics’ cries…after the second guy does it, just like football…)

 

[Thud]

I don't think "censoring" means what you think it means, but as Musk himself stated, freedom of speech doesn't mean freedom of reach.

We can debate the pros and cons of deplatforming a former president who attempted an overthrow of the government another day...

 

[kurtlikevonnegut]

At the risk of stating the obvious... Rivian is probably just going to follow Tesla's roadmap. Tesla was never profitable when they only produced the Model S/X. Not until they went through "production hell" with the Model 3 did they finally turn a profit.

It seems reasonable that Rivian won't be profitable until their less expensive mass market R2 series. R1T/S exist to establish the brand identity and get Rivian a reputation for making excellent and desirable products. And they will face the same "production hell" with R2, but maybe with some lessons learned from Tesla, whatever those may be. Hopefully Rivian won't need to compromise too much for the sake of simplicity with lower price products.

You are missing a HUGE aspect of Rivian's path to profitability compared to Tesla, which is the EDV platform. So many people seem to think that the R2 platform is the only lower cost/high volume product to lead to profitability but that's exactly what the EDV is. At max output in current facilities Rivian can produce 30% more EDVs than R1 while using significantly less resources (motors and batteries specifically).

The EDV is Rivian's "Model 3/Y" and they are making it in parallel with their "S/X." Tesla didn't have anything even remotely similar to the 100,000 van order from Amazon for the EDV or a platform like the EDV that is marketable for commercial purposes at its inception or for the first 6-8 years of mass production.

 

[Thud]

You are missing a HUGE aspect of Rivian's path to profitability compared to Tesla, which is the EDV platform. So many people seem to think that the R2 platform is the only lower cost/high volume product to lead to profitability but that's exactly what the EDV is. At max output in current facilities Rivian can produce 30% more EDVs than R1 while using significantly less resources (motors and batteries specifically).

The EDV is Rivian's "Model 3/Y" and they are making it in parallel with their "S/X." Tesla didn't have anything even remotely similar to the 100,000 van order from Amazon for the EDV or a platform like the EDV that is marketable for commercial purposes at its inception or for the first 6-8 years of mass production.

I don't know much about Rivian's EDV plans, but have they been talking to UPS and Fedex? Or just expanding Amazon's EDV fleet?

 

[kurtlikevonnegut]

I don't know much about Rivian's EDV plans, but have they been talking to UPS and Fedex? Or just expanding Amazon's EDV fleet?

My understanding of the agreement with Amazon is that the EDV specifically for last mile delivery services is locked for use only by Amazon until the first 100,000 units have been delivered (no later than 2030 but if they hit max production rate next year closer to 2Q 2024). If they have been negotiating with other companies specifically for last mile delivery purposes, I would think that those would be done behind closed doors until that order has been fulfilled.

That said, it sounds like the EDV platform is highly tailorable for other purposes as well such as work vans, ambulances, etc. The skateboard is highly replicable and the panels are modular, so you could fully customize the interior to suit a wide variety of purposes that current work vans are used for. Combine that with their FleetOS that will provide recurring revenue, and it's a huge piece of the revenue pie for them. I personally expect the fleet side of the house to drive more revenue than the consumer side for the forseeable future.

 

[Donald Stanfield]

We can debate the pros and cons of deplatforming a former president who attempted an overthrow of the government another day...

What president was convicted of attempting to overthrow a government? I must have missed that.

 

[SANZC02]

My understanding of the agreement with Amazon is that the EDV specifically for last mile delivery services is locked for use only by Amazon until the first 100,000 units have been delivered (no later than 2030 but if they hit max production rate next year closer to 2Q 2024). If they have been negotiating with other companies specifically for last mile delivery purposes, I would think that those would be done behind closed doors until that order has been fulfilled.

That said, it sounds like the EDV platform is highly tailorable for other purposes as well such as work vans, ambulances, etc. The skateboard is highly replicable and the panels are modular, so you could fully customize the interior to suit a wide variety of purposes that current work vans are used for. Combine that with their FleetOS that will provide recurring revenue, and it's a huge piece of the revenue pie for them. I personally expect the fleet side of the house to drive more revenue than the consumer side for the forseeable future.

There is a bit more to the contract, Amazon got the first EDV this year, that gives them exclusive rights to it through 2026 and first right of refusal to the ones built in 27 and 28

This is part of the contract from this article;

”On Friday, Rivian shared new details of the Amazon deal in a filing with the U.S. Securities and Exchange Commission, revealing how closely its fate is tied to one of its biggest benefactors. The e-commerce giant will have exclusive rights to Rivian’s delivery vehicles for four years after receiving its first one, and it gets right of first refusal to buy the vans for two years after that.”

There is also something I read somewhere but I can’t find it now that the Amazon contract is not a fixed price for the vans but a cost+ price. It did not state what the margin was but it does mean they will not be selling the vans to Amazon below cost at any point.

 

[SANZC02]

Out of respect for this forum and the people on it, can we tone down the political discussions?

It is very polorising and if people want to fall down that rabbit hole there are several forums out there you can go to. This is certainly not what I come to this forum for.

 

[Jac]

What president was convicted of attempting to overthrow a government? I must have missed that.

On the topic of this thread about Rivian’s prospects, we’ll all see how that works out over time. Conversely, the nation watched in shame as the other topic you mention played out for hours on live TV.

 

[Donald Stanfield]

On the topic of this thread about Rivian’s prospects, we’ll all see how that works out over time. Conversely, the nation watched in shame as the other topic you mention played out for hours on live TV.

So no convictions then? Thought so. I was under the impression people were innocent until PROVEN guilty by a jury of their peers in this country. I guess that only applies if you agree with their politics.

You’re right about the shame though, but wrong about the reason.

 

[ADVNOW]

This MSN (Microsoft Network) article exhibits little understanding of the capital requirements of a new manufacturer or the realities of ramping up production. I am not aware of a truck or SUV competitor that directly threatens Rivian’s product market positioning —- and most R1T preorder holders aren’t on the verge of buying Ford’s Lightning instead. Maybe Volkswagen’s planned Scout branded products starting later this decade?

Predictions of Rivian’s imminent demise are nonsense.

Unfortunately, news reporting these days seems like commentary and short sighted. Just a fast turning blah because some other agency might get it out before them, its quantity not quality. No real investigation or reporting to grasp a full understanding of what they are reporting on.

 

[SASSquatch]

I dont doubt that the coming years will be very challenging and that the long term viability of the company is something we should not take for granted. Just not ready to write angry/drunk articles about Rivian's imminent demise yet.

Agreed 100%. It is WAY too early for that.

At the risk of stating the obvious... Rivian is probably just going to follow Tesla's roadmap. Tesla was never profitable when they only produced the Model S/X. Not until they went through "production hell" with the Model 3 did they finally turn a profit.

It seems reasonable that Rivian won't be profitable until their less expensive mass market R2 series. R1T/S exist to establish the brand identity and get Rivian a reputation for making excellent and desirable products. And they will face the same "production hell" with R2, but maybe with some lessons learned from Tesla, whatever those may be. Hopefully Rivian won't need to compromise too much for the sake of simplicity with lower price products.

Here's the difference. When Tesla was going through production "hell" they were doing so as the only major EV player in the market. No offense to Nissan, Chevy, Ford, and BMW, but their electric vehicles sold less over their entire lifespan than Tesla sold in their last quarter of production.

Tesla had a never ending supply of reservations and functionally zero competition.

Rivian has a lot of competition and more is coming. On the flip side they have MUCH more capital than Tesla did at the same time in their young existence so that is a very large advantage and will help Rivian get through some very challenging upcoming quarters.

That said, they must, and I mean must, find a way to keep demand of their vehicles sky high. They will absolutely need to raise additional capital - through stock issuance, debt, and funding rounds. They will need to show that they have a huge reservation backlog in order to secure that capital.

At the pre-March 1 pricing, keeping demand sky high was much easier since they were the first and only real production EV truck in town (Ford had not yet rolled the Lightning off the line). Now that Rivian has adjusted the price for, you know, sustainable margins, it is inevitably going to cool some demand, especially with alternatives out there or in the pipeline.

With inflation, supply chain pressures, and labor costs rising, they may need to raise prices again - or start to strip away features in order to conserve margin so that they can lower the cost of the vehicle production.

The next investor call will be absolutely telling. Investors are expecting a rough road ahead, the stock has been absolutely pummeled and was trading at less than $25 a share today.

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