Rivian CFO to Participate in Bank of America Global Automotive Summit Wednesday April 13th

[nc10]

Did you get any sense that the 50K current capacity was max they have been able to achieve prorata……..

Did you get the feeling she was on top of it?

Yes. No hesitation in her answers, which made good sense. Nothing too technical or complicated in her answers but she was covering more operational questions than financial, and seemed comfortable doing that.

I didn’t really follow one of her comments though, about being cash flow positive before EBITDA is positive., I am not a finance guy, but thought I had a semi-understanding, probably just me.

I need to relisten, she was just talking about the R1 line I think. Also she didn’t mention expanding normal to 200k, which has been mentioned before.

She emphasized the 50k number was based on current operating data. That rate was something they tracked frequently, though for very short run times, and sounded one operation or section was tested at a time.

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[moosehead]

Thanks again @nc10. Glad to hear the CFO is capable, I was concerned not only about lack of a heavyweight COO in production phase, but also the rest of the C Suite.

Cash flow positive generally means that no new funds are needed to support the business in the form of debt/equity/retained earnings. Positive EBITDA then has the business making profits.

 

[kurtlikevonnegut]

Thanks again @nc10. Glad to hear the CFO is capable, I was concerned not only about lack of a heavyweight COO in production phase, but also the rest of the C Suite.

Cash flow positive generally means that no new funds are needed to support the business in the form of debt/equity/retained earnings. Positive EBITDA then has the business making profits.

Being cash flow positive in 2024 would be excellent for those of us long on RIVN because it would mean they would likely not need to issue more stock to continue expansion since they should have enough in the war chest currently to get them through FY 24 with room to spare.

 

[Craigins]

It is an interesting point though, that I think @Guy was making, that I hadn’t seen mentioned by analysts, etc. Amazon’s current orders would not necessitate making vans at a 85k/year rate,, and rivian is not allowed to sell vans to anyone else in years 1-4. (Unless Amazon ups the order).

Let’s hope rivian is not locked into 2018 pricing w Amazon. Surely not….

If you read the S-1 literally and assme the lawyers that wrote it knew what they were doing, one thing to be careful with is that Amazon does not have exclusive rights to the van line.

We also have agreed under the EDV Agreement that until the fourth anniversary of when Logistics first receives EDVs (the “Initial Delivery Date”), whether or not Logistics purchases any EDVs from us, we will exclusively provide last mile delivery vehicles to Amazon, and from the fourth anniversary to the sixth anniversary of the Initial Delivery Date, Amazon will have a right of first refusal to purchase last mile delivery vehicles that we produce. Under the EDV Agreement, Logistics has the right to decide how many EDVs to purchase, which may be fewer than expected, or delay the delivery of such purchases. Certain factors outside of our control may influence Logistics’ decision as to the number of EDVs to purchase from us and the timing of delivery, including Logistics’ ability to deploy a charging infrastructure across their delivery stations.

So 100k is the base of the contract, but not necessarily the final number. It also extensively references "last mile delivery". That opens up Rivian to sell to service providing companies (think plumbers, carpenters, hvac, etc).

The 85k is because the van has a dedicated line and is easier to build. It doesn't make sense to have R1 vehicles mixed with the vans on a line. The 85k number is not significant. It isn't showing preference of the van over the R1. It is simply physics.

As for the price, Amazon could potentially pay more per vehicle so that RIVN shows greater profit. Not sure on the legality of all that.

 

[moosehead]

Being cash flow positive in 2024 would be excellent for those of us long on RIVN because it would mean they would likely not need to issue more stock to continue expansion since they should have enough in the war chest currently to get them through FY 24 with room to spare.

+1, it would be a rather massive accomplishment in start up auto manufacturing. Truly hope it is not more over promise and under deliver.

Further, let’s hope positive EBITDA and growth of it, out race a potential recession.

 

[nc10]

If you read the S-1 literally and assme the lawyers that wrote it knew what they were doing, one thing to be careful with is that Amazon does not have exclusive rights to the van line. .............

The 85k number is not significant. It isn't showing preference of the van over the R1. It is simply physics.

OK, So selling vans to "not last mile delivery applications" is possible. Good point, I guess see that. (I've said this before and just ignored my advice, really have to read carefully what Rivian says specifically and not go beyond that.) Not sure how AMZN/RIVN, defines a "last mile delivery vehicle", seems like a "non last mile delivery vehicle" would need some sort of distinguishing feature/function, though I suppose it could look the same and just be defined by customer application. If this is part of the plan (and with re reading, I see it is mentioned in the S-1), I'm surprised we're not hearing any indications of it, we hear mention of R2 vehicles, etc..

I understand the van production throughput could be higher, just saying, its still an important number, its a larger part of what Rivian needs to make to fill up the Normal plant, helps with a lot of fixed costs, lots of common operations also, battery make, drive production, etc, so almost certainly key to profitability.

Ref from the S-1

Within today’s industry model, volume automakers build commercial vehicles with no customization, requiring vehicles to be upfit separately adding cost and time for the customer. While our initial customization capabilities are focused on last mile delivery use cases, we intend to expand this capability over time in new commercial vehicle offerings to cover the key customer upfit needs for the broad range of commercial vehicle applications.

We also have agreed under the EDV Agreement that until the fourth anniversary of when Logistics first receives EDVs (the “Initial Delivery Date”), whether or not Logistics purchases any EDVs from us, we will exclusively provide last mile delivery vehicles to Amazon

 

[Arky]

Maybe I'm a bit of a pessimist but that software margin makes me a bit nervous that they plan on leaning hard on their captive audience.

Well yeah, why do you think they don't want to support phone mirroring apps? It's certainly not for our benefit.

 

[Craigins]

OK, So selling vans to "not last mile delivery applications" is possible. Good point, I guess see that. (I've said this before and just ignored my advice, really have to read carefully what Rivian says specifically and not go beyond that.) Not sure how AMZN/RIVN, defines a "last mile delivery vehicle", seems like a "non last mile delivery vehicle" would need some sort of distinguishing feature/function, though I suppose it could look the same and just be defined by customer application. If this is part of the plan (and with re reading, I see it is mentioned in the S-1), I'm surprised we're not hearing any indications of it, we hear mention of R2 vehicles, etc..

I understand the van production throughput could be higher, just saying, its still an important number, its a larger part of what Rivian needs to make to fill up the Normal plant, helps with a lot of fixed costs, lots of common operations also, battery make, drive production, etc, so almost certainly key to profitability.

Ref from the S-1

Within today’s industry model, volume automakers build commercial vehicles with no customization, requiring vehicles to be upfit separately adding cost and time for the customer. While our initial customization capabilities are focused on last mile delivery use cases, we intend to expand this capability over time in new commercial vehicle offerings to cover the key customer upfit needs for the broad range of commercial vehicle applications.

We also have agreed under the EDV Agreement that until the fourth anniversary of when Logistics first receives EDVs (the “Initial Delivery Date”), whether or not Logistics purchases any EDVs from us, we will exclusively provide last mile delivery vehicles to Amazon

They do have a whole section for the vans. https://rivian.com/fleet

If you scroll down it asks what best describes your business, and last mile delivery is one of the options.

Fleet will also be a huge income generator if they can sell the whole package to businesses with a FleetOS subscription.

 

[jjwolf120]

Maybe I'm a bit of a pessimist but that software margin makes me a bit nervous

Software margins are generally pretty high. A 65% margin on software is at least toward the lower end of software margins (my opinion, not backed by any actual research).

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