R1S Tri -- October Lease Offer

[Schroederhc]

What is the current price per mile (excess) over the standard miles allocated in any Rivian lease? I drive 20K miles per year in my R1T and 12K per year in our R1S.

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[Hereforthesnacks]

surprised they are doing this straightaway for the Tri motor - would have thought they had some pent up demand to be sufficient for Q4 supply.

I think the numbers this year show soft demand? Will see what this month’s numbers bring. Q4/Q1 will be the biggest indicators. If those numbers aren’t up, then there’s a deeper problem.

 

[Hereforthesnacks]

What’s the miles per year and money down? Curious as I didn’t get the offer email

I think the offers in the website are the same.

 

[Ajax]

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Confirming—same on my lease signed last weekend.

 

[Jabbahop]

What is the current price per mile (excess) over the standard miles allocated in any Rivian lease? I drive 20K miles per year in my R1T and 12K per year in our R1S.

yeah - we put about 25K miles/year and that gets very expensive with a lease. We have a Dual Max from Feb 24 with 19K miles already so depreciation on ours is too much to be able to make the lease work.

 

[Hereforthesnacks]

yeah - we put about 25K miles/year and that gets very expensive with a lease. We have a Dual Max from Feb 24 with 19K miles already so depreciation on ours is too much to be able to make the lease work.

Same here. We are at 20k miles a year. Lease costs at that point outweigh the benefits. Owning sucks because of EV deprivation, but it’s the lesser of two evils.

 

[Pacblue22]

I own a R1S Gen 1 and drive less than 10k a year...is that when leases make sense? I have never leased a vehicle, and the payments would be essentially equal to what I pay now over the term of the long loan. Thoughts?

 

[bfilippo]

yeah - we put about 25K miles/year and that gets very expensive with a lease. We have a Dual Max from Feb 24 with 19K miles already so depreciation on ours is too much to be able to make the lease work.

Yeah I’m in the same boat if we ever decided to get the R1S or R2/3 to replace Model Y. Though my boat is made of paper because rivian still doesn’t offer leasing in Maine anyway.

 

[Electron]

The macroeconomic challenges are real. Selling six figure vehicles ...at significant volume...is a challenge. I expect Rivian to pull out all the stops in December to try and make good numbers.

Pure speculation on my part here but this is what I think Rivian needs to do to make numbers.

Leasing is the way the majority of folks will be going on these vehicles due to the cost and fear of depreciation (even if it is just on paper).

1) Gen1 Loyalty - Rivian is already offering $3,500 to existing gen1 owners which I think is great. The issue is many of those vehicles have lost a lot of value. Example, my 2023 R1T Quad with 21k mi was quoted 58k for trade and the vehicle was $88.5k MSRP new. That's about 35% depreciation in 18 months. Now there are vehicles that are worse...much worse....but it’s a big hinderance to upgrading. Now I paid less than that in May 2023 however I would still be looking at a 27k loss (before loyalty incentive) if I traded it + any of the other accessories I put into it like PPF (7K), Tonneau ($1,100), Tint, etc. It’s a lot of loss to stomach and it’s what is holding me back from upgrading to Gen2.

2) Lease Subsidy - This is one I think Rivian needs to bring to Gen2. I know many have reported that the leases are a good deal but on Gen2 the recent money factors posted are around 8-9% range with residuals close to 60%. Many of you already know, the cost of the lease is the difference between price of the car & residual with an added rent charge.

3) Financing - Folks who want to finance can already get good rates through a CU...its leasing where folks need more incentives. Due to the fear of depreciation most will want to lease an EV these days.

4) Trade Subsidy - I don't expect Rivian to do all of these things but the elephant in the room here is use car values...especially EVs ....many folks are upside down on their vehicles and either unwilling or unable to roll that negative equity into the next purchase/lease.

Less than 20% of car buyers pay cash...so the other 80% need to lease or finance it...these are important considerations for Rivian to keep moving units.

I don't expect Rivian to offer all of these things but the leases and trades are where they should be focusing IMO. The higher the vehicle price, in this macroeconomic environment, the harder it will be to move.

Rivian has one of the best vehicles in the market today....especially the Tri motor and soon to be release quad motor T and S. Rivian needs more incentives to move units and further build the brand reputation before R2. R2 and R3 will be where Rivian is really able to achieve economies of scale and become profitable.

Sorry didn't mean to turn this into a book.

Very well said. I've posted in several threads about the real challenges that Rivian will be facing, but very few people seem to want to acknowledge the truth due to several reasons that could span from being heavily invested, being upside down, not wanting to face reality/truth etc.

Whatever the reason may be, Q4 is a huge uphill battle for Rivian and I agree that the incentives that we're seeing right now are extremely weak and ballsy. Borderline cocky and that's just being blunt.

If Rivian wants to move units they need to up their game big time. Moving more volume at a smaller profit margin is still better than not moving much at all and not meeting expectations.

Rivian really seems to think like they've been in the game with a well established brand to be able to play the brand snob card, but nuh uh that ain't gonna fly or move units.

So Q3 was pretty much a voucher holder quarter. Q4 being the real deal, I'll ask again to all the fellow community members,

"Do you really think, honestly, really think that Rivian will organically sell ~14K+ Units in Q4 and to hit the 57K mark by the end of this year?"

I'm hopeful, but not overly optimistic. In my opinion, Rivian needs to start NOW with being really aggressive with the incentives. Offer the low APRs across more of the models, throw in goodies (PPF, free color options etc..), sweeten the lease deals to bring it closer to a 1.0% lease factor, etc., because as of right now most of the non Max pack lease deals are Meh at best sitting ~1.5%.

They need to start now as in October and use all the time in Q4 to ramp up sales. By not doing so and coming up short may be more detrimental for the Brand in a lot of ways that will sting more at the end.

This does not mean that Rivian needs to take a big loss, rather just get the units sold at a lower profit margin. Period. All RJ said was that they'd be in positive gross profit by the end of Q4. He did not mention any specifics, which is good.

So with that statement, whether it's a small positive gross profit or a large one doesn't really matter in my opinion. To be able to show and meet the expectations being in the positive, I think would hold a similar weight at the end of the day. The headlines would hit the same, "Rivian in positive gross profit as claimed."

Don't forget about the Ace card. That card is called, "Suga Daddy VW money." However, it's important to note that the $5B is NOT realized. Currently iirc it's only $1B and from that $1B there are a lot of conditions that go with that.

As for the depreciation factor I think reality will hit come 2025. Any luxuryish cars in general tank in value and with the R1x also being an EV in an unwelcoming market (sad to say) here in the US, along with all the other ecnomoical and political challenges, we haven't seen anything yet. The biggest hit with depreciation is within the first 3 years and we'll be coming up to that ~3 year mark with the 2022 R1x so I personally see the values tanking come 2025.

So in that regard, in some situations, one could look at it in whether they want to accept a smaller loss now vs taking a larger loss later? There are a lot of factors for sure, but holding onto an EV and expecting it to appreciate in value or to ride out the negative equity will mean to HODL for a very very long time.

This is not to say to trade in or sell your current EV at a loss, just because, but for those who like to be in a new car every ~3 years or so, of course leasing is usually the best option (especially for EVs).

 

[Electron]

I wonder how much of the Colorado tax credit can be applied to this or any of Rivian’s leases.

If it is true that the incentives go toward the cap cost then it could be a pretty sweet lease deal for those in States that offer a great lease incentive.

Ex. $85K R1x - $9K State Incentive for a 3 year lease, brings the cap cost down to $76K.

The numbers can get tricky. but if the $7500 Fed incentive on a lease also applies to the cap cost then that'd be pretty favorable for someone who plans to buy the lease out at the end? Or an early lease buy out after a few billing cycles.

The average residual factor gathered from the good folks here and videos online that have shared their paperwork seems to sit ~62% on avg. Taking the example above on a $85K Riv, that'd be $52,700 for the buy out at the end of 3 years?

$85,000 - $52,700 = $32,300 / 36 months = $897 (pre tax)

$76,000 (w/ 9K state incentive) - $52,700 = $23,300 / 36 months = $647 (pre tax)

I'm just a bit cautious about the depreciation that the R1x (EVs in general) will face to where even with a large $9K state incentive, will that be enough to keep things above water I wonder in 3 years?

It would be great to have someone chime in to confirm how the $7500 actually factors in, using the $85K price as an exmaple.

 

[Scoiatael]

Hmm, maybe I should have waited to get my dual motor and waited for tri. Ohh well.

 

[Electrified Outdoors]

also being an EV in an unwelcoming market (sad to say) here in the US

We have a bad short term memory here in the US. EV adoption has slowed because gas is fairly cheap again. EV sales are still growing just at a slower pace.

Rivian should have good plans in place. I think Rivian knew all along they weren’t going to be profitable until they got to the mass market vehicle.

Rivian also has a big service challenge. I mean I am a patient guy but 2-3 month for a service appt is not good. Rivian seems to be making progress with opening new service centers but they can’t keep up with the service demand so the wait times have not come down.

a lull in sales is what Rivian needs to get caught up.

 

[AllInev]

I'm still recovering financially from my mid-2022 purchase. Sorry, Rivian, but that was a once-in-a-lifetime purchase for me.

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