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if that's the case then why are max packs pushed to 2023? Seems like they are focusing on profits by doing that.
Way I see it is that by focusing on less product variants they can more easily ramp up production, which favors growth.
 

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Growth = more trucks produced, sold, and delivered. Large pack = less cells per pack. Large pack = more trucks produced, sold, and delivered. Large pack = growth.

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if that's the case then why are max packs pushed to 2023? Seems like they are focusing on profits by doing that.
You have that backwards. Max packs require more cells per truck thus reducing the number of trucks that can be produced for a given battery supply and limiting growth of production line capacity.
 

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if that's the case then why are max packs pushed to 2023? Seems like they are focusing on profits by doing that.
Is Amazon vans growth or profits?

I'm of the profit opinion.
 

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smaller pack equals more trucks being produced which equals more profit for more trucks. We can all look at this in many different ways
 

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I'd argue Amazon Vans is a growth channel, not a profit center, currently. They're not going to make a ton of money off those deliveries, but EVERY company is going to want EV last mile vehicles soon, so Rivian getting into that game now will help them grow into profit in the long term.
 

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Is Amazon vans growth or profits?

I'm of the profit opinion.
Its growth and product diversity in the eyes of investors. The Amazon van is their least niche product. There are many many companies that need last mile delivery vans, they are used heavily and replaced often in many cases. The Amazon deal was a way to have a partner help with the development cost.
 

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smaller pack equals more trucks being produced which equals more profit for more trucks. We can all look at this in many different ways
I guess it depends on the definition of profitability. That could be in aggregate or in margin %. By percentage, the Max Packs are absolutely more profitable than the Large packs as they have a super high margin on that extra $10k.

I think she means the latter (profit margin), because otherwise growth=more profits in aggregate by definition.

I think they also are speaking to the choice to launch three vehicles at once. This is growth oriented by likely not as efficient for profit margins.
 

electruck

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smaller pack equals more trucks being produced which equals more profit for more trucks. We can all look at this in many different ways
True, but not all of those ways can be correct.

We simply don't know whether the profit margin is higher or lower for one pack size or another (although it is very reasonable to assume the Max pack has the higher profit margin). In fact, Rivian may currently be selling everything at a loss to drive volume (lower retail price increases sales). But, assuming a hypothetical scenario where all pack sizes have the same profit margin, there is certainly a scenario where increasing volume would also increase profit.

What we can say without question is that fewer trucks is fewer trucks and that is the antithesis of capacity growth. Capacity growth will ultimately lead to efficiencies of scale (both in process and material costs) which will ultimately increase profits.

For a business, the ultimate goal will always be increased profits. What Rivian is stating is that they are playing the long game, not the short.
 

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We simply don't know whether the profit margin is higher or lower for one pack size or another (although it is very reasonable to assume the Max pack has the higher profit margin).
It's a pretty near certainty that the Max Pack is higher margin. An entire pack has a current production cost of about $135/kwh. Even if you applied that same number to the marginal 45kwh (marginal cost is almost surely even less to just add cells to an existing pack with capacity), the cost to Rivian for the Max is about $6k and they are charging $10k for a 40% profit margin.

They've indicated that currently overall gross margins are actually negative because they are not at scale, but even if they were at scale and achieving leading margins like Tesla, they'd be about 20%. So, the 40% on Max increases overall margin.
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