Sponsored

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

Ralph

Well-Known Member
First Name
Ralph
Joined
Jun 14, 2021
Threads
1
Messages
604
Reaction score
610
Location
Arkansas
Vehicles
R1T, Outback
Rivian's biggest customer didn't make a profit for years. Not his biggest fan, but I'd sure like to see more of this in corporate America:

" CEO Jeff Bezos has long maintained that investing in future growth is more important than hitting quarterly earnings targets, much to Wall Street’s chagrin.

Rivian R1T R1S Rivian's Q3 quarterly loss is expected between $1.18B to $1.28B Amazon profit
Sponsored

 

LordUlhtred

Well-Known Member
Joined
Sep 3, 2021
Threads
1
Messages
58
Reaction score
83
Location
Fairfax, VA
Vehicles
Model 3
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.
The main issue with any new auto manufacturers is to balance capital expenditure with their on hand cash/cash flow. Right now, Rivian has around 2 billion in cash (?) and the expenditure rate is extremely high due the ramp (hopefully the next few quarters will be much lower than previous quarter) and they have very little cash flow - very little car deliveries. There is a reason Rivian is going IPO soon or they might run out of cash. I am still hopeful that Rivian will succeed but don’t think Rivian‘s ramp is much different than Tesla. For sure, RivIan’s path seems easier but i think the road ahead is “vey bumpy….
 

Cosmacelf

Well-Known Member
Joined
Nov 11, 2020
Threads
18
Messages
419
Reaction score
510
Location
San Diego, CA
Vehicles
Rivian R1S, Tesla Model X
Occupation
Software
As other have pointed out, 50K or so pre-orders is quite robust. That backlog will grow, not shrink, as vehicles get into customer hands and they become company evangelists selling the brand (as happened with both Apple and Tesla).

If you want to compare with Tesla, the correct comparison is with Model S. Both vehicles had about the same initial production volume estimates and price point. But there are so many differences too. The market is far, far more accepting of EVs than back in 2012. Tesla was scraping by with $200M raised. Rivian has $10B raised and growing.

So you have to evaluate Rivian on its own, comparisons with Tesla really aren’t worth much. Demand is not a problem. Rivian will sell every single vehicle they produce, at escalating prices and with a healthy waiting list for at least the next two years, and probably longer.

The risk factors for Rivian are production execution and untested management. We are into our second delivery missed target. They were supposed to deliver last summer, and then this past summer. We are still waiting.

BTW, Rivian’s war chest is all very nice, it’LL ensure the company doesn’t go bankrupt anytime soon, but it can also cause lack of urgency and a tendency to waste $$, which will hurt the stock price eventually.

As far as investing in Rivian goes, gosh, could they have scripted a more fraught time to bring out the IPO? The IPO could go on sale before Rivian has shaken out their production ramp. You’re asking investors to make a leap of faith that they can actually manufacture cars at scale, which is THE most difficult thing Rivian has to accomplish. It begs the serious question, why now? Rivian could delay the IPO for six months after they’ve demonstrated some kind of production ramp. That would remove a lot of risk and presumably give them a better valuation.

It isn’t as if they need the money now. They could easily wait six months.

Retail investors may not care, but institutional investors will. So it’ll be very instructive to see how many shares get allocated to the directed share program versus the traditional underwriters.
 

Andy96734

Active Member
First Name
Andy
Joined
Jul 1, 2021
Threads
0
Messages
41
Reaction score
29
Location
Hawaii
Vehicles
Tesla MX 90D 2016
Occupation
Retired
Clubs
 
Bloomberg


Rivian Sees Deeper Loss on Higher Production Costs for Debut EV
Yueqi YangOctober 22, 2021, 1:58 PM HST
Rivian R1T R1S Rivian's Q3 quarterly loss is expected between $1.18B to $1.28B -1x-1


The Rivian R1T electric pickup truck.
Photographer: Patrick T. Fallon/Bloomberg

Rivian Automotive Inc, the Amazon.com Inc.-backed electric-pickup maker that’s seeking to go public, expects to record a quarterly net loss of up to $1.28 billion due to costs associated with the start of production of its debut truck.

The losses are increasing from a year ago due to “significant labor and overhead costs” for its plant in Normal, Illinois, the Irvine, California-based startup said Friday in a filing. The net loss for the period ended Sept. 30 will range from $1.18 billion to $1.28 billion, according to the preliminary results.

“As we just started to ramp vehicle production at the site, the facility produced limited quantities of vehicles in the period,” the company said. The operating loss for the quarter is expected to be $725 million to $775 million.

The company, which began delivering the R1T truck last quarter, previously reported a net loss of nearly $1 billion in the first half of the year.

Rivian is among the most serious competitors lining up to take on electric-vehicle leader Tesla Inc. It was seeking to be valued at about $80 billion in a listing, Bloomberg News reported in August when the company announced that it filed confidentially for an IPO.

Founder and Chief Executive Officer R.J. Scaringe may maintain control over Rivian through a class of stock giving him 10 votes per share compared with the single vote allocated to each regular share, the amended filing said. It didn’t specify the percentage of voting power or total shares that Scaringe will own.

To attract retail investors, Rivian plans to allocate a portion of its IPO to the personal finance startup SoFi Securities LLC’s online brokerage platform, the company said. Rivian also disclosed the issuance of more than $1 billion in nonconvertible debt securities in three-year period.

The company continues to list the size of its offering as $100 million, a placeholder sum will change when terms of the share sale, including price range, are set.

Rivian also said claims made by Tesla in a trade secrets lawsuit are “meritless.” The company previously said only that it aims to defend itself in the suit.

— With assistance by Crystal Tse

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE
 
OP
OP
3l3c7r1c

3l3c7r1c

Well-Known Member
Joined
Sep 21, 2021
Threads
6
Messages
217
Reaction score
197
Location
Seattle, Washington
Vehicles
2020 Hyundai Palisade Limited, 2012 Honda CR-V
It is listed on their books as a debt, and they cannot use the cash for anything. It has to sit in escrow/trust.
That sounds exactly like when you take a loan; show it as debt in your book. Why can’t you use it if you directly take it from the customer as order money? Even some 3rd party fund raising platforms like indiegogo releases the money to the campaign for spending.
 

Sponsored

OP
OP
3l3c7r1c

3l3c7r1c

Well-Known Member
Joined
Sep 21, 2021
Threads
6
Messages
217
Reaction score
197
Location
Seattle, Washington
Vehicles
2020 Hyundai Palisade Limited, 2012 Honda CR-V
As other have pointed out, 50K or so pre-orders is quite robust. That backlog will grow, not shrink, as vehicles get into customer hands and they become company evangelists selling the brand (as happened with both Apple and Tesla).

If you want to compare with Tesla, the correct comparison is with Model S. Both vehicles had about the same initial production volume estimates and price point. But there are so many differences too. The market is far, far more accepting of EVs than back in 2012. Tesla was scraping by with $200M raised. Rivian has $10B raised and growing.

So you have to evaluate Rivian on its own, comparisons with Tesla really aren’t worth much. Demand is not a problem. Rivian will sell every single vehicle they produce, at escalating prices and with a healthy waiting list for at least the next two years, and probably longer.

The risk factors for Rivian are production execution and untested management. We are into our second delivery missed target. They were supposed to deliver last summer, and then this past summer. We are still waiting.

BTW, Rivian’s war chest is all very nice, it’LL ensure the company doesn’t go bankrupt anytime soon, but it can also cause lack of urgency and a tendency to waste $$, which will hurt the stock price eventually.

As far as investing in Rivian goes, gosh, could they have scripted a more fraught time to bring out the IPO? The IPO could go on sale before Rivian has shaken out their production ramp. You’re asking investors to make a leap of faith that they can actually manufacture cars at scale, which is THE most difficult thing Rivian has to accomplish. It begs the serious question, why now? Rivian could delay the IPO for six months after they’ve demonstrated some kind of production ramp. That would remove a lot of risk and presumably give them a better valuation.

It isn’t as if they need the money now. They could easily wait six months.

Retail investors may not care, but institutional investors will. So it’ll be very instructive to see how many shares get allocated to the directed share program versus the traditional underwriters.
Totally agree with everything except first point. Whether the order backlog will grow/shrink depends on initial quality of the vehicle, and people’s experience with it - that one is yet to prove. If IPO would take place 6 months later we can get all these answers. Right now looks like they are trying to test FOMO crowd.
 

Ioman

Well-Known Member
Joined
Oct 22, 2021
Threads
13
Messages
72
Reaction score
83
Location
Portland Oregon
Vehicles
Rivian R1S
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.
Agreed, mathematically it comes out around the same. I would also imagine you'd have less folks backing out of an order with the higher deposit - which is good.
 

ruawahoo2

Well-Known Member
Joined
Aug 25, 2021
Threads
6
Messages
62
Reaction score
152
Location
Utah
Vehicles
Palisade and CX-5
As other have pointed out, 50K or so pre-orders is quite robust.
Yes. Folks seem to forget that the deliveries will produce revenue which will offset some of the loss. And they have a lot of potential revenue.

Assuming that they have 50K R1? pre-orders (I rounded up) and that the average price of those vehicles is $70K (a conservative estimate), that is $3.5B in potential revenue. Add that to the 10K of Amazon vans that need to be delivered by end of 2022, which with an estimate of $50K a van (an estimate totally out of thin air) for $.5B, Rivian is looking at revenue of $4B-ish in the next 18-24 months. This, of course, also assumes that Rivian can knock out all those vehicles during this period.

My guess is that if Rivian can get to 100K consumer vehicles sold/year, it will be alright.
 

Autolycus

Well-Known Member
Joined
May 2, 2021
Threads
14
Messages
2,027
Reaction score
3,113
Location
ATL
Vehicles
ICE only :(
That sounds exactly like when you take a loan; show it as debt in your book. Why can’t you use it if you directly take it from the customer as order money? Even some 3rd party fund raising platforms like indiegogo releases the money to the campaign for spending.
Because it’s a fully refundable deposit. Federal (and most state) laws exist to prevent the “Dale” situation. It’s why “crowdfunding” deals are structured the way they are, as opposed to preorders.
 

doozenberg

Active Member
First Name
Dan
Joined
Nov 1, 2021
Threads
0
Messages
43
Reaction score
29
Location
Irvine, CA
Vehicles
‘18 Model 3, ‘22 Model Y, R1S reservation holder
Occupation
Physician
The main issue with any new auto manufacturers is to balance capital expenditure with their on hand cash/cash flow. Right now, Rivian has around 2 billion in cash (?) and the expenditure rate is extremely high due the ramp (hopefully the next few quarters will be much lower than previous quarter) and they have very little cash flow - very little car deliveries. There is a reason Rivian is going IPO soon or they might run out of cash. I am still hopeful that Rivian will succeed but don’t think Rivian‘s ramp is much different than Tesla. For sure, RivIan’s path seems easier but i think the road ahead is “vey bumpy….
Except Tesla wasn't trying to ramp 3 vehicle lines at once and didn't have a Jeff Bezos who owned 20% of the company breathing down their necks for 100k delivery vans. This ramp is aspirational at best, impending dumpster fire at worst. Hats off to Rivian if they pull through this alive without going through a massive slash and burn fest.
 

Sponsored

Dbeglor

Well-Known Member
Joined
Sep 20, 2021
Threads
1
Messages
511
Reaction score
828
Location
TX
Vehicles
Yes
Except Tesla wasn't trying to ramp 3 vehicle lines at once and didn't have a Jeff Bezos who owned 20% of the company breathing down their necks for 100k delivery vans. This ramp is aspirational at best, impending dumpster fire at worst. Hats off to Rivian if they pull through this alive without going through a massive slash and burn fest.
I find it interesting that Lucid is "losing (investing)" far more than Rivian despite only having a single vehicle launch vs. three.....

Lucid lost $3.6 billion in the first half of 2021, while Rivian spent $2 billion from the start of last year through the end of June 2021.
https://www.wsj.com/articles/ev-sta...=7ojdngwncha7y12&reflink=share_mobilewebshare
 

Coast2Coast

Well-Known Member
First Name
Mark
Joined
Feb 17, 2020
Threads
26
Messages
451
Reaction score
564
Location
Santa Cruz, Ca./Odawara, Jpn
Vehicles
1981 Volvo wagn; 2006 Tacoma SR5; 2021 Toy Mirai
Why now, IPO, why now?

Several reasons, actually. First, the EV market is taking off, moving from a so-called innovators phase where 2.5% of the population buy products to an early adopter phase where 13.5% buy products. Think of Prius, iPhones and Tesla early days. Sales were slow at first and, then, bam, they took off.

Rivian has to scale as sales take off, not only at home, but elsewhere too. The auto business is global. It takes at least 2 years to get a new auto plant up and running, and 3 years is more likely when planning, permits, engineering, construction, hiring, training and production are taken into account. Tesla's factory timelines in Shanghai, Berlin & Austin tell us this.

So, first reason: scaling with the market is time-critical and capital-intensive. Being too early or too late is bad news.

Once Thanksgiving preparations begin in earnest, everyone is distracted until after New Years.
Either go IPO now or wait six months, as @Cosmacelf suggests.

Lucid stock just jumped 50%, Tesla shares broke big on the Hertz deal, Ford and GM are accelerating their EV plans. It's shaping up as a go big or go home moment. No, Rivian will not go under, if it waits another 6 months, but it might be infinitely harder to grab headlines and establish an IPO beachhead 6 months from now.

Finally, IPO share prices are based on promise, not performance. Yes, performance helps, but Rivian wants to grab the buzz around promise while it can. Six months from now, performance will be more important than promise because six months from now, we'll have a very good idea about how well Rivian truck and van production is doing and how many new Rivian orders are flowing in. And in the short-term, the picture may not be pretty. If Rivian can produce 20-25K vehicles in its first full year of production, it will be doing well, but from a Wall Street perspective, that's just a drop in the bucket.

It's not "now or never", but it's much better now than later. And it's better now than after Thanksgiving when everyone's caught up in holiday madness and distraction.
 
OP
OP
3l3c7r1c

3l3c7r1c

Well-Known Member
Joined
Sep 21, 2021
Threads
6
Messages
217
Reaction score
197
Location
Seattle, Washington
Vehicles
2020 Hyundai Palisade Limited, 2012 Honda CR-V
I find it interesting that Lucid is "losing (investing)" far more than Rivian despite only having a single vehicle launch vs. three.....

Lucid lost $3.6 billion in the first half of 2021, while Rivian spent $2 billion from the start of last year through the end of June 2021.
https://www.wsj.com/articles/ev-sta...=7ojdngwncha7y12&reflink=share_mobilewebshare
This is really interesting that Lucid is spending so much more! So far I haven't seen they are spending on their charging infrastructure as well. One reason could be showing stock based compensation as expense which pre-IPO company possibly don't have to.
 

Ladiver

Well-Known Member
First Name
Jeff
Joined
Jan 23, 2021
Threads
48
Messages
926
Reaction score
1,785
Location
Ca
Vehicles
GMC 3500, Corvette Z06, Rivian R1T, Rivian R1S
Clubs
 
This is really interesting that Lucid is spending so much more! So far I haven't seen they are spending on their charging infrastructure as well. One reason could be showing stock based compensation as expense which pre-IPO company possibly don't have to.
Maybe they are spending it on a Communications Department? :D
Sponsored

 
 




Top