Rivian Reports 2022 Q3 Earnings. R2 Vehicle Platform Launching in 2026

[mkg3]

Stock is currently up 17%, so obviously investors agree that the numbers are good.

The whole market was up irrationally due to lower than expected CPI numbers. The Rivian now has reclaimed the price from last week.

At least 8 firms lowered RIVN price target today because of R2 slip and their lack of clarity for weekly production level and CapEx for 2023.

So the number Rivian put up was okay with two bright spots - reaffirm 25k delivery for this year and R1 net backlog up to 114k.

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[SSteveEV]

92.5 million Rivian miles driven so far...

Had my (incredibly helpful and pleasant) mobile recall service today. Assume they added +162 as Rivian Miles too

 

[dp351]

That is an odd take. They actually have 4 models (R1S, R1T, EDV500 and EDV700).

Compare that to Tesla, they only had the Model S from 2012 to 2016, we can’t count the 1st edition Roadster, it was a niche market vehicle building around 2500 between 2008 and 2012.

Their second real mass produced vehicle (Model X) was supposed to start shipping late 2013 but did not come to market until Late 2015 as a 2016 model.

The more commodity Model 3 was originally supposed to be released 2015/2016 but came to market late 2017 so it was 5 years between 2012 Model S and the 3rd vehicle coming to market in late 2017 and another 2 years (2019) for them to deliver the 4th model (Model Y).

I think Rivian’s model mix is pretty good and sounds like they are well on thier way for the R2 platform.

I have a larger concern that the resistance that they are getting in Georgia will cause a lot of expense and delays. Seems like they would have been better off going somewhere that would have less resistance from the community even if the government sweetheart deal may not have been as good.

Seems like Rivian could also add the van to its consumer vehicle lineup relatively easily if/when they have adequate production capacity. There’s only one competitor in this market thus far, the VW ID Buzz.

 

[Redline]

Well someone today bought 3250 January 2024 $75 calls for $2.60.

 

[itselectric]

It's really a customer satisfaction issue at this point, but there have been complete failures (CV-Joint blowouts) too. Creaking, cracking, tocking, etc... sounds should not be coming from am $80K vehicle with 800mi on it.

It would have been super helpful if someone had asked RJ,etc.. about the CV/half-shaft issue.

Rivian has a couple of options and neither are going to be good for the stock. They are spending a lot of money (I assume) to redesign the suspension and related components to address this.

Once they have a solution they can either update all of the older vehicles that have this problem, I assume a 9 figure fix.

Or, they tell the early customers that these issues aren't safety related and therefore they will not be widely fixed under warranty, at which point they will have a ton of very unhappy customers which may hurt the brand and their ability to sell vehicles in the future.

Considering they are having to also redesign the tonneau cover and apparently are going to retrofit to early orders, that's likely another 9 figures of cost.

From my perspective and I'm biased, losing $100-200 million on a recall and replace of half shafts or other components is a much more long term perspective as having an initial base of extremely happy customers is far more important than saving money upfront. I hope Rivian feels the same and the cost may be far less than I'm guessing above.

 

[NY_Rob]

From my perspective and I'm biased, losing $100-200 million on a recall and replace of half shafts or other components is a much more long term perspective as having an initial base of extremely happy customers is far more important than saving money upfront. I hope Rivian feels the same and the cost may be far less than I'm guessing above.

I could see it costing $100 million to replace half-shafts + CV-Joints on 15-20K+ vehicles.
They are not common inexpensive half shafts as found on 99% or regular vehicles. They are expensive, specially designed and manufactured exclusively for variable ride height vehicles. They probably have to replace all of the existing ones because if they're not noisy now.. they will be sooner or later. 15K vehicles at $6K/vehicle costs you $90 million right there... and they are still pumping out vehicles with known defective components just like they did with the tonneau issue.

 

[Count Orlok]

meanwhile, PSNY will deliver 50,000 cars in 2022.

 

[Kidentist]

meanwhile, PSNY will deliver 50,000 cars in 2022.

And their stock is only at $5 and change......

 

[Count Orlok]

And their stock is only at $5 and change......

and?

 

[Count Orlok]

In light of the Q3 Rivian numbers, I found this tidbit to be interesting,

Overall, for the third quarter of 2022, Nissan sold 1,276 Titans, while Rivian sold 4,400 trucks.

Source: Rivian Now Sells More R1T Trucks Than Nissan Does Titan Trucks

The linked source also speculates on a Nissan ET.

 

[Jac]

Rivian has a couple of options and neither are going to be good for the stock. They are spending a lot of money (I assume) to redesign the suspension and related components to address this.

Once they have a solution they can either update all of the older vehicles that have this problem, I assume a 9 figure fix.

Or, they tell the early customers that these issues aren't safety related and therefore they will not be widely fixed under warranty, at which point they will have a ton of very unhappy customers which may hurt the brand and their ability to sell vehicles in the future.

Considering they are having to also redesign the tonneau cover and apparently are going to retrofit to early orders, that's likely another 9 figures of cost.

From my perspective and I'm biased, losing $100-200 million on a recall and replace of half shafts or other components is a much more long term perspective as having an initial base of extremely happy customers is far more important than saving money upfront. I hope Rivian feels the same and the cost may be far less than I'm guessing above.

To the best of my knowledge, Rivian has not yet said anything publicly about “tocking” CV/half shafts on R1 vehicles. Posts I’ve read on this forum for months now suggest it is, however, a common service ticket reason - and the current service center remedy is apparently to apply more grease to these low mileage vehicles.

As I wait for my R1S next year, I will be following with interest how Rivian deals with this.

 

[Yossarian]

And their stock is only at $5 and change......

.
Actually a bit more than that:

Polestar Automotive Holding UK PLC (NASDAQSNY) traded at $6.49 at close of the session on Monday, 11/21/22, made an upward move of 2.69% on its previous day’s price.

 

[Yossarian]

meanwhile, PSNY will deliver 50,000 cars in 2022.

I think that the 50k number represents cars built in Polestar's China factory and delivered domestically. Still, that's a pretty impressive performance.

 

[Longreach]

Polestar is not the competition and not really comparable to Rivian. First, Polestar benefits heavily from Geely development resources so it’s not really comparable to a cash dependent start up. And the real competition for Rivian is coming thick and fast from the legacy manufacturers.

The truck faces bonafide competition from the F150L, Silverado, GMC and Ram EV, all made by competent companies that do this for a living. The SUV faces upcoming competition from Ford (Explorer EV), GM (Lyric, Blazer, Equinox), Hyundai/Kia… Sure you could argue Rivian has some unique off road party tricks and a temporary head start, but how long will that differentiation last?

Even in the commercial space, which should have been Rivian’s best opportunity, they face unexpectedly strong competition from GM/Brightdrop and Ford.

The biggest surprise in the EV world is how fast Ford, GM, VW and Hyundai/Kia read the writing on the wall and proceeded to invest billions in EV development, including batteries and material. Everyone thought they would drag their feet, like Toyota and Honda, but instead they’ve reacted quickly by bringing investment, design experience and scale to EVs.

Rivian might very well survive in some form, but from a valuation perspective you really have to consider what Rivian has compared to what Ford/GM have or can do in terms of design capability, scale, cash, brand equity, and commitment to building EVs people will buy in volume.

 

[DJG]

Polestar is not the competition and not really comparable to Rivian. First, Polestar benefits heavily from Geely development resources so it’s not really comparable to a cash dependent start up. And the real competition for Rivian is coming thick and fast from the legacy manufacturers.

The truck faces bonafide competition from the F150L, Silverado, GMC and Ram EV, all made by competent companies that do this for a living. The SUV faces upcoming competition from Ford (Explorer EV), GM (Lyric, Blazer, Equinox), Hyundai/Kia… Sure you could argue Rivian has some unique off road party tricks and a temporary head start, but how long will that differentiation last?

Even in the commercial space, which should have been Rivian’s best opportunity, they face unexpectedly strong competition from GM/Brightdrop and Ford.

The biggest surprise in the EV world is how fast Ford, GM, VW and Hyundai/Kia read the writing on the wall and proceeded to invest billions in EV development, including batteries and material. Everyone thought they would drag their feet, like Toyota and Honda, but instead they’ve reacted quickly by bringing investment, design experience and scale to EVs.

Rivian might very well survive in some form, but from a valuation perspective you really have to consider what Rivian has compared to what Ford/GM have or can do in terms of design capability, scale, cash, brand equity, and commitment to building EVs people will buy in volume.

I know everyone has their perspective and opinion, but I don't think anything mentioned actually competes with Rivian. Especially for the truck. People cross shopping is not the same as competing, there's a difference. Having a bed and electric motors doesn't make something competitive or in the same market. Case in point, the majority of people buying R1Ts have never owned a truck before (and it's not because there wasn't an electric option). They never owned a truck because they were too big, sucked to drive and/or had far too many compromises for a bed they would rarely use. Frankly, I doubt there will ever be anything truly competitive with the R1T, because there isn't another company with the same DNA and perhaps more importantly, the market is too small to try. It would require someone like Porsche deciding to make a Cayenne truck. Or, probably most likely, Tesla making a different truck than the one they are (Cybertruck is not competitive either).

They will have much more competition for their R2 products (just a naturally more competitive part of the market), but they have little to no competition or threat to selling 30k/year each of the R1's for the foreseeable future, which is all they aspire/have the capacity to do.

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