Rivian's Q3 quarterly loss is expected between $1.18B to $1.28B

[3l3c7r1c]

Not that I don't believe they will be successful, but they have a long way to go to prove themselves. 48k reservation number is not that great compared to what Tesla (they got 500k reservation for model 3 on debut with lot lower valuation) and Ford gets as reservation. As hiring is ramping up, service centers will be starting, and running new charges - it should be even more costly. Most likely during initial ramp up time they won't make profit from unit sales as well.

Rivian Sees Deeper Loss on Higher Production Costs for Debut EV - Bloomberg

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[DucRider]

It would scare me if they weren't spending some of the $3B they have in the bank to ramp up production and build out the service and charging infrastructure.

Comparisons to Tesla (particularly something like the Model 3 that was a later generation vehicle) are useless. Different times, funding, philosophy, backers, etc. Tesla has always had to rush vehicles out the door to pay their bills (and have been on the brink of folding multiple times as a result). Rivian is in a different situation.

 

[Matt D.]

Also, can we stop comparing preorder numbers? A $100 preorder is not comparable to a $1000 preorder. If we need to compare something, let’s wait a little bit and compare conversion rates for the preorders.

 

[Scoiatael]

They will likely have losses every quarter next year too. This isn't unusual for a startup, especially one making vehicles.

 

[SANZC02]

Not that I don't believe they will be successful, but they have a long way to go to prove themselves. 48k reservation number is not that great compared to what Tesla (they got 500k reservation for model 3 on debut with lot lower valuation) and Ford gets as reservation. As hiring is ramping up, service centers will be starting, and running new charges - it should be even more costly. Most likely during initial ramp up time they won't make profit from unit sales as well.

Rivian Sees Deeper Loss on Higher Production Costs for Debut EV - Bloomberg

Not sure I agree with the comparison. The deposit on the Model 3 was for a vehicle they were saying could be purchased under 40k. It was also the 4th vehicle model released.

A better comparison would probably be the Model X, it is in nearly the same price range as the R1 series. It was also the third model Released by Tesla and only had around 35k pre orders.

Looking at the Rivian with 49k preorders of R1 series and 100k preorders for the commercial delivery van, they are sitting at close to 150k vehicles for a brand new manufacturer.

 

[ruawahoo2]

Some of the costs that Rivian is experiencing are one-time because they are making HUGE capital expenditures.

 

[SANZC02]

They will likely have losses every quarter next year too. This isn't unusual for a startup, especially one making vehicles.

This is likely to continue for even more years. Tesla did not have a positive year until 2019 and if you take away the ZEV credits they would have not had a positive year until 2020. As a matter of fact, they had very few positive quarters prior to 2019.

 

[Biturbowned]

Also, can we stop comparing preorder numbers? A $100 preorder is not comparable to a $1000 preorder. If we need to compare something, let’s wait a little bit and compare conversion rates for the preorders.

To be fair, preorders for the model 3 were around 2k if memory serves.

 

[SANZC02]

To be fair, preorders for the model 3 were around 2k if memory serves.

Initially they were 1k then they lowered them to 100 dollars.

I had one but canceled it and bought the Model S when they sent out an email dropping the S to 66k. Thought it a better deal and was assured to get it before the tax credits started going away.

Still very happy with my decision over 5 years later.

 

[SeaGeo]

They will likely have losses every quarter next year too. This isn't unusual for a startup, especially one making vehicles.

If a growth company is profitable, it's likely not reinvesting enough. Especially a company that's dependent on inventory.

 

[3l3c7r1c]

Also, can we stop comparing preorder numbers? A $100 preorder is not comparable to a $1000 preorder. If we need to compare something, let’s wait a little bit and compare conversion rates for the preorders.

Lol. It’s closer comparison than you are thinking now. Tesla model 3 reservation was $1,000. Tesla literally got $5B interest free loan for 3 years.

 

[3l3c7r1c]

Some of the costs that Rivian is experiencing are one-time because they are making HUGE capital expenditures.

According to the article if I take the capital expenditure out of equation, their operational expenses is $700m+ for the quarter.

i am all in for they are doing the right thing and taking right steps. Just not convinced that their valuation should be that high.

 

[DuckTruck]

For anyone who's able to participate in the IPO but thinks that Rivian is a bad bet, please message me regarding the sale of your initial shares.

I know most folks here share the sentiment that Rivian will be a solid long-term hold, but that is something I feel strongly in my bones. I get the comparisons to Tesla, but these are two very different companies, with two very different leaders with very different visions and cultures.

In the future, the entire EV industry will have Elon Musk to thank for forging a way forward, the legacy OEM's especially. Without his willingness to risk it all in bringing EV's into the mainstream, we'd still be talking about how GM created the EV1, only to snuff it out a few years later.

After Tesla got the ball rolling quite some time ago, the legacy OEM's sat on their collective asses and did nothing about it for years. I'm guessing they thought that the EV movement would fail. Oops! It was nice that Nissan brought the Leaf to life, it's just a shame they didn't give it much technology to make it work well. All of the PHEV's we've seen since are nice, but they're nothing like true EV's.

Along comes Rivian. I love the stealthy mode of working for a decade while flying below the radar. No bold proclamations based on pipedreams that burst into flames a mile and a half into their first drive, and no need to coast downhill like a Pinewood Derby car at a Boy Scout Jamboree. Rather, they gathered a solid team of great people quietly pulling together to build what people want. Fits and starts in the early years for sure, but nothing unusual about that.

The important part is that they recognized the need to change where they were going, and they charted a new direction. That doesn't guarantee success, but the failure to recognize the wrong path guarantees failure. That RJ saw the need to change course gave his company a leg up on the older, established car-makers who couldn't see the beauty of electrifying personal trucks.

Back to the subject at hand, the fact that it's costing a boatload of money to build a company that makes large, somewhat expensive vehicles is not a shock. The fact of the matter is that they have the backing and financial support to do so. This gives them the advantage of doing it right, rather than having to rely on carnival tents to make projections for shareholders who have lofty expectations built on your dreamy promises.

Having close to 50,000 reservations is nice, but also having a company like Amazon back you with major cash and a likely hard order for 100,000 vehicles bodes really well for your company. While the outflows will likely continue for some time, I believe Rivian will become one of the automotive stalwarts of the future.

Can't wait to see how all of this unfolds!

 

[Autolycus]

Tesla literally got $5B interest free loan for 3 years.

This notion continues to live on despite many attempts to kill it. Tesla was legally prohibited from using any of that money, as is Rivian. It is not a loan. It is listed on their books as a debt, and they cannot use the cash for anything. It has to sit in escrow/trust.

 

[n8dgr8]

Losses are going to be big until they start delivering trucks. I can't wait for the R1T to come!

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