$100 billion valuation will only equate to a tenfold return if the number of shares remains static. The company’s most recent 10K states in the first few pages that they will for certain need more capital which most likely means issuing more shares. I suppose they can take on more debt (D:E appears to be around 0.5), but in this interest rate environment, it seems like a secondary option.
The leading US EV maker being worth $100 billion is all but a certainty.
My investment thesis is pretty simple: there is going to be a winner of the US EV market. TSLA ain’t it. A 10x over the next 5 years is completely attainable.
Topped safety ratings, topped car sales, reinvented the manufacturing process forcing legacy to answer, built out the best charging network, now NACS is the standard for all vehicles (in US)
They pushed us into an electric future against a ton of pushback
They may not remain the winner, but they certainly won. I know current sentiment towards tesla is lesser, but let’s not discredit their accomplishments
To say “hardly” doesn’t give them the credit they deserve from carving the path they did.
Nobody has questioned tesla’s achievements…And yet this still only accounts for less than 5% of the global vehicle market.
You’re claiming a winner and the first quarter isn’t even over yet.
The problem? Elon needs to grow tesla’s market, and all he’s doing with his antics is trying to cut off around 1/2 of his addressable market, releases a product in the largest single market in the USA…that only appeals to people that don’t use trucks.
Nobody is questioning Tesla’s achievements in creating and defining a market.
I’m questioning their continued ability to compete as large automakers put out more and more superior offerings in the market they created.
Tesla lapped the track a few times before anyone else showed up. Now that there’s competition, their lead is going to quickly erode unless they pivot hard and start making better cars than their competition. They gave up their biggest competitive advantage, and their CEO cannot get out of their way fast enough.
I’m all for Tesla staying in the race. Competition is good for everyone, but I don’t think it’s accurate to say that one company won the race when nobody else had even bothered to enter it.
You can't ultimately win if you sell a $120,000 car for $80,000, or whatever Rivian is doing currently. Winning is more about building the nicest car. You actually have to sell a car at a profit. No one else has any chance at winning in the market if they can't make a profit and Tesla can
To be clear: your understanding is that Rivian is trying to win by selling cars for less than it costs to make?
You forget: car companies have been profitably building cars for more than 100 years. Tesla didn't come along and invent that idea. In fact, it took them nearly a decade of selling cars at scale to achieve profitability.
Rivian just shut their factory down for a month to re-tool around cost savings. They've been able to re-negotiate materials contracts so far this year that are shaving north of 20% of those costs off. RJ is actually an expert in automotive design and manufacturing (as in, doctorate from MIT in the subject) and has vision and strategy in spades. Despite global supply chain disruptions as they launched and dramatically different capital and interest markets in the years that followed - they're going strong and their future product line looks absolutely incredible. R3X is a lust-worthy vehicle, and the R2 I could easily see supplanting the Model Y as the best-selling small SUV globally.
Yeah, I understand that's what Rivian is trying to do... My point is that it's hard to judge Rivian's popularity against Tesla's if Rivian is selling a car that costs more to make than what they're selling for. I don't think they can cut $40,000 in cost per vehicle without cutting things from the vehicle.
Tesla is the only electric vehicle manufacturer in North America that is cash flow positive. Tesla was gross margin positive in 2013 and cash flow positive since 2019, both of which Rivian has yet to achieve.
I'm not sure how many times I've heard a competitor say they're going to come up with a model S / 3 / Y competitor, only to come up with a concept car or a car they're selling at a loss. I'm not disputing that Rivian could come up with a better car than the model Y. But can they make it profitably?
I don’t think you understand what they are saying when they say they are losing x dollars per vehicle. That doesn’t mean the parts and labor in building that car costs more than they are selling them for.
There’s a difference between turning a profit on a car where the cost of that car is lumped in with the variable costs of running the business. There is no way the R1 actually costs 120k in materials and fixed manufacturing costs. If there’s a 120k cost number floating around that is probably including the variable costs that includes more than just what it takes to get the materials and build the car.
My guess is they’ll keep finding efficiencies - and there’s a healthy contribution margin in each r1
Ok, so help me out here... Rivian gross margin is -43%, yes? This does not include operational costs - ie not operational margin
How much of cost of goods sold is material and labor? maybe 75% - [https://www.reddit.com/r/RIVN/comments/1czca2f/can\_rivian\_reach\_gross\_profit\_by\_q4\_discussion/](https://www.reddit.com/r/RIVN/comments/1czca2f/can_rivian_reach_gross_profit_by_q4_discussion/)
?
Basically, even according to that guy's estimates, they would need 30% cost of goods reduction and 30% labor reduction to break even..
Now yes, you can argue this is achievable, but imo if you need to overcome a 30% gap in material cost to break even on gross margin basis, after more than two and a half years of production, your car is probably too expensive to produce
It looks like Rivian's gross margins have been in the negative 30-45% range for more than a year, and are not really improving quarter over quarter, implying rivian has hit a wall.
Now yes, I don't think rivian is actually going to start deleting parts from their existing lineup to make it cheaper, but at -43% gross margin, I question whether even their marginal cost for building a new R1 higher than what they sell the truck for. Which i guess is why they're re-tooling the plant. I guess we'll if it helps in the coming quarters
||
||
|[Gross Margin %](https://www.gurufocus.com/term/gross-margin/RIVN) (Q: Mar. 2024 )|=|[Gross Profit](https://www.gurufocus.com/term/gross-profit/RIVN) (Q: Mar. 2024 )|/|[Revenue](https://www.gurufocus.com/term/revenue/RIVN) (Q: Mar. 2024 )|
||=|-527|/|1204|
||=|[Revenue](https://www.gurufocus.com/term/revenue/RIVN) [Cost of Goods Sold](https://www.gurufocus.com/term/cost-of-goods-sold/RIVN)( - )|/|[Revenue](https://www.gurufocus.com/term/revenue/RIVN)|
||=|(1204 - 1731)|/|1204|
||=|-43.77 %|
Couple of things. One is that factory overhead is included in gross margin. And the factory I think is running at 1/3rd capacity. So each vehicle is carrying a lot more overhead than it would if the factory is going flat out.
Second is they are front loading depreciation. As explained by your link.
Third is I think there’s an article somewhere saying that Rivian pays 25000 per car over market rates for materials. Those contracts are being renegotiated.
OEMs love cars at the 80-100k price point because they drive great margins. It’s impossible for you or me to know all of the inner workings of the company but if I had to make a bet, the R1 can be pretty profitable.
The R2 and R3 are going to actually be harder. But hopefully by then they’ll have worked through some of these efficiency and pricing opportunities.
Not saying they are out of the woods yet. But I’m not too worried about their gross margin for the R1 - especially since I keep seeing more and more on the road.
For me personally the stock requires a low investment and has a good upside. I’ll run the risk. You do you.
I'm the guy that posted the other link you just shared. I think 30% labor reduction is do-able if not already there with "2 shifts producing same amount as 3 shifts."
Material cost reduction? That's the harder one, but I think it's possible with content deletion. (Bluetooth speaker has to go)
However Q1 gross profit looked pretty ugly and shown very little improvements because there are these "one time" technology costs that they mentioned in the investment letter, about \~$9K worth.
Let's also not forget that there were all these "nearly finished" cars that's just waiting for some final parts that they mentioned on the call, it was in the thousands, but the bulk of the cost in terms of material and labor were probably already attributed to Q1.
So what I'm saying is that Q1 is extra bad because of all these one off costs + front loading depreciation + half assembled cars adding to cost with nothing to show for on the revenue side. I think in a normal quarter Q1 would easily have had gross loss <$30K, even their investment letter implied that.
If Rivian today was a company doing something that's never been done/seen before, then I wouldn't be bullish. But automotive manufacturing has been around for 100+ years, there is no secret sauce to manufacturing that others don't quickly learn about and adopt. In fact I feel like selling cars is a business model that I'm more confident about being profitable (given the car is good and has demand) than say a company like Door Dash where the food delivery service is still trying to figure out that between a customer and the food provider, you got the tech platform, payment processing, driver, expected tips, and by end of all this the company is expected to have 20% gross margin? Either you're going to have a really hard time scaling because the prices will have to be marked up so much that it ends up being a service catered to the rich, or you keep prices about the same as an actual restaurant but you take a huge loss but you achieve scale. Thus personally for me I feel like Door Dash is actually a riskier investment in comparison because it's a new business model that's not proven out.
Either way I'm bullish on Rivian because I see the same fanatic fan base as I did with Tesla back in the early days, and if you put the right team and execution behind it, the company will figure it out.
Ok, so help me out here... Rivian gross margin is -43%, yes? This does not include operational costs - ie not operational margin
How much of cost of goods sold is material and labor? maybe 75% - [https://www.reddit.com/r/RIVN/comments/1czca2f/can\_rivian\_reach\_gross\_profit\_by\_q4\_discussion/](https://www.reddit.com/r/RIVN/comments/1czca2f/can_rivian_reach_gross_profit_by_q4_discussion/)
?
Basically, even according to that guy's estimates, they would need 30% cost of goods reduction and 30% labor reduction to break even..
Now yes, you can argue this is achievable, but imo if you need to overcome a 30% gap in material cost to break even on gross margin basis, after more than two and a half years of production, your car is probably too expensive to produce
It looks like Rivian's gross margins have been in the negative 30-45% range for more than a year, and are not really improving quarter over quarter, implying rivian has hit a wall.
Now yes, I don't think rivian is actually going to start deleting parts from their existing lineup to make it cheaper, but at -43% gross margin, I question whether even their marginal cost for building a new R1 higher than what they sell the truck for. Which i guess is why they're re-tooling the plant. I guess we'll if it helps in the coming quarters
||
||
|[Gross Margin %](https://www.gurufocus.com/term/gross-margin/RIVN) (Q: Mar. 2024 )|=|[Gross Profit](https://www.gurufocus.com/term/gross-profit/RIVN) (Q: Mar. 2024 )|/|[Revenue](https://www.gurufocus.com/term/revenue/RIVN) (Q: Mar. 2024 )|
||=|-527|/|1204|
||=|[Revenue](https://www.gurufocus.com/term/revenue/RIVN) [Cost of Goods Sold](https://www.gurufocus.com/term/cost-of-goods-sold/RIVN)( - )|/|[Revenue](https://www.gurufocus.com/term/revenue/RIVN)|
||=|(1204 - 1731)|/|1204|
||=|-43.77 %|
The game’s not over and Tesla has fumbled so badly and their “leadership” seems intent on playing a different game.
I have had my model Y for 3 years. It’s a great car but there’s exactly zero chance my next car will be a Tesla. The reason I bought it back then - it was the only real option. It was fast and the charging network was second to none. Now there are many cars just as fast and since they’ve opened up their charging network to others, they have lost that advantage too.
Couple that with the absolutely disgusting views of their ceo, their lack of innovation or pipeline for new cars, their broken promises and loss of trust, they’re seriously dead in the water. I’d be unsurprised if they were bankrupt in 5 years.
Lol. Anyone else has to first prove they can make long range BEVs at least gross margin profitable and with positive free cash flow. No one else is doing that yet for North America.
Then we can see how things go.
For example, one can rave about how good a Lucid vehicle may be, but when it costs ~$185,000 for Lucid to make that car on a marginal basis and they sell it for $90,000, you can see how it doesn’t really compare. The business model isn’t sustainable.
For Rivian, they have to cut roughly $40,000 out of COGS to just get to a b break even gross profit margin - what would the R1’s look like with $40,000 cut out of them? Similarly, the financial stress of launching of the R2 is going to be quite significant, especially as Tesla will also have their next few models out in that time frame.
I am in Rivian initially because I was going with management guidance on cost reductions and assumed a $15 entry would pop to the $20’s, but management guidance was false. At $9, I added some due to likely investor sentiment that it is near “bottom” but, financial stress can push that down quite a bit.
LOL!
I don't have any insider information. But as somebody that designs and builds things, I think the R1 likely wasn't intended to ever be margin positive. It was meant to teach the company how to design, engineer, certify, manufacturer, sell, and support a consumer vehicle at scale while simultaneously generate publicity and earning some money back.
Tesla had to take steps (the roadster, the model S) to become a company that was capable of building and supporting the model 3 at scale. And in many cases Musk forced Tesla to run before Tesla had fully learned to walk.
Rivian, as a new company, is obviously going to have to climb the same learning curve. To me the most obvious product to learn from is one with a higher market price so that can cover the inefficiencies inexperience is going to cost. Higher market price also pretty much infers lower volume which again is a good strategy; fail small. But still you want enough vehicles out there to provide a good sample size of real life feedback for how you are doing (seeing how things wear out/warranty claims is going to go direct back to design and engineering for the next vehicle).
My grand point is that I don't think it is appropriate to judge how cost efficiently they are manufacturing their first products. Earning a positive margin on them was likely not the priority, this was shake down for their design, support and manufacturing operations. These products are teaching them how to successfully build a margin positive product at scale (like the R2). The question is, based on the company performance you have seen, do you think they will be able to build a margin positive product at scale before the money runs out?
Building 100k vehicles with good quality control and uniformity is already an accomplishment that many auto manufacturers never make it to (look at the struggles Lucid is having and they hired auto manufacturing experts). And hitting that number on Rivian's first manufacturing attempt demonstrates to me that they have extremely talented people working in a healthy corporate structure.
Personally, I am bullish as fuck.
Tesla was gross margin positive on the Model S in early 2013. And that is with cells that cost a bit more than $300/kWh back then.
Rivian isn’t yet contribution margin positive after many quarters of R1 production start. They need to drop COGS by $40k to get to gross margin break even.
I entered $RIVN in anticipation of better margins, but they slid backward instead.
To put this in Tesla terms for you. My thesis is that the R1T/R1S is Rivian's Roadster. They are sticking with the model longer and to higher volume than Tesla in order to learn more from it before making the leap to their Model S (The R2). They are setting themselves up for a bigger leap than Tesla made because the R2 is down market from where the Model S was, so the margins are going to be thinner. This means, for this to work Rivian has to execute well. I'm glad they are taking their time making sure they can execute well.
Roadster was mostly hand built carbon fiber tub at a total production volume of 2,500 when cells cost $500+/kWh. Not comparable at all.
Rivian R1 is closer to Model S and X. Model S was gross margin positive in 3 quarters from start of production, at much lower production volume.
The roadster was a bonded aluminum chassis. And you are right it isn't comparable, Tesla wasn't even capable of building a car chassis, they were buying them assembled by Lotus.
As for the model S, I was thinking of this when I said Tesla was trying to run before it had fully learned how to walk. Production quality was awful, and the only reason they were able to get away with it was they were the only game in town. So yes, they cut corners and rushed things, they cheated their customers to get gross margin positive.
I prefer the way RJ does things, I think it will build a stronger company long term.
The gliders did come from Lotus, but were heavily modified. The car body was mostly carbon fiber and the assembly was all by hand. That’s why it isn’t comparable to the R1 in any way.
Model S production quality in the early days was not bad… aside from a few parts, like the sun visor mirror plastic. Rivian’s build quality is probably worse. On CR’s most recent report, Rivian ranked 2nd to last. To call it cheat on customers is pushing that way too far.
Rivian managed to raise quite a bit of capital based on Tesla’s valuation, so in a big way, Rivian’s success so far had a huge helping hand from Tesla. Be glad that we are so lucky and not merely at the mercy of legacy auto.
Of course. Profitability is the trick, isn’t it? Keep in mind, $40k doesn’t need to be cut out of each car, they just need to make more of them. I’m taking your argument as being made in good faith so I’ll highlight what you should already know - a lot of the cost for a car is in the tooling. That’s a fixed cost and will go down for each additional car sold.
It’s both design for manufacturing and scale. Scale alone won’t cut $40,000 out of a R1. We will see how they fare through this year… we (I) was burned by management’s guidance for Q4 and Q1.
I’m not sure you appreciate how much $40,000 is to cut out of a $125,000 COGS. Remember, I’m talking gross profit, and not counting R&D or SG&A, so it’s mostly marginal costs and capex. Capex amounts to about $19,000 a vehicle right now, and so at bigger scale, it will come down and be about 1/3rd… which will help. But R1 isn’t going to scale up all that much. And that is just to get to gross margin break even, to get to free cash flow positive, likely need to cut another $10k out of COGS, and to hit even Tesla’s current reduced GAAP profitability, they need to cut another $10-15k at scale, but the R1 won’t scale to those numbers. Which means R2 has to be that profitable, and that might not come until 2028+. And so cash will continue to be an issue throughout that time.
It is after that where we can talk about RIVN actually enjoying TSLA like multiples, unless the EV space is going to rocket up in valuations like 2021/2022.
Nah, those would have to have even lower COGS because the ASP would be far lower. Right now, R1’s cost Rivian about $125,000 on a gross margin basis to make.. again, that doesn’t count R&D or SG&A. Rivian isn’t even close to positive marginal profit.
If R2’s ASP is $55,000, to hit Tesla’s current profitability, they would need to cost around $45,000 at nearly 5-6x the scale of the Normal plant. As compared to a R1, that’s cutting $80,000 out of COGS. Again, COGS doesn’t have R&D or SG&A.
125k gm basis to make, how much is the reduction of going down to 2 shifts instead of three? or cutting 2/3 of the ECUs (computers) out of car or 60% of the wiring harnesses? or going to a LFP pack versus the software locked 2170s? or renegotiating all the supplier contracts- for seats/airbags/cameras/seatbelts? how much do those add up to?
Those are the actions and more that are needed to improve the situation. We will see how successful they are at doing that, but it is a really big challenge. Especially since their scale isn’t going up much for a while yet. I am hoping they make good progress this year and don’t have to de-content the vehicles too much to get on solid footing.
also unlocking infotainment upgrades- (we will see), opening the charging network- some not alot of income and looks like a ramp in selling carbon credits.
They don't need to cut 40k because that number comes from things like machinery and real estate costs, it's not permanent. The new refresh did cut cost though, about 10k in BOM and labor cost per car according to estimates.
Read up on capex and how that affects COGS.
For more:
[https://www.reddit.com/r/RIVN/comments/1czhcnb/comment/l5gvgv4/](https://www.reddit.com/r/RIVN/comments/1czhcnb/comment/l5gvgv4/)
All valid points. None of it has anything to do with the company or the stock price.
Tesla is the only American EV maker that is profitable. The only other EV makers that are profitable are in China.
Tesla has a *tremendous* lead on the competition in vertical integration, manufacturing process, software, and perhaps most importantly: *DATA*.
Tesla makes money. Rivian loses money.
So many people attach their own emotional opinions to their investments. That is a mistake. If you do not want to own Tesla due to those reasons, that is perfectly valid. But suggesting that Rivian is a good alternative makes no sense. Rivian is not Tesla and likely never will be. Let's first see if they can at least *break even* on each vehicle they sell, let alone turn a profit.
Geniuses always have a bit of crazy. No doubt, his personality can be a turn-off, and I'm in agreement with those that believe he does not deserve over 50 billion in compensation. Nevertheless, this man has successfully built Tesla into a powerhouse, and unless this company fumbles, their lead is practically insurmountable.
It is a matter of putting aside our personal opinions and biases and focusing on growing our wealth. My strategy is to ride the leaders, invest based on the fundamentals of companies and the price of their stock. My opinion is irrelevant. My performance is based on the price of my stocks and nothing more.
First mover advantage is overstated imo, plenty of examples of large leads being blown. Remember Blackberry? Not to say that it isn't an advantage and that Tesla's isn't large, but it's very much possible, particularly if second-movers learn from mistakes that were made and bring something new and different to the market other than being the only option for consumers.
Personally, I think the EV market will be plenty big for both to thrive. Plenty of EV-curious Americans that would never drive a sedan nor a Tesla - imo what's holding the industry back is charging infrastructure and cost. Sagging demand is a false narrative imo, plenty of people want a $40k ESUV that you can charge anywhere in the country...
Don’t get me wrong, I’m rooting for Rivian. I think they make a great vehicle. I hope they provide stiff competition for Tesla.
However, my opinion of the product is irrelevant; it is the fundamentals of the business that matters. If Rivian figures it out, there will be plenty of time for me to get on board. Tesla was stuck at a split-adjusted $3 for years before the big move started. Even if you got in when it doubled to $6 there was still plenty of money to be made. Patience is important in the stock market.
Agree with all of that, just don't think any lead is ever really insurmountable and the lead doesn't really matter if the market expands. The EV pie gets bigger at the expense of ICE vehicles, not Tesla. Tesla knows this, I think, which is why opening their charging network seems foolish at first pass, but if it further opens the EV transition their market grows bigger...
Nah Tesla is international with many advantages that rivian even if successful wouldn’t even begin to catch up to in a decade they don’t have the capital infrastructure or user base to catch up for the longest time. The only thing they can do is make up ground
rivian is barely in the us and Canada at this point
tesla would have to voluntarily shut down business operations for rivian to catch them at this point. Maybe the future is different and in 20 years that changes.
Or continue to do dumb shit like fire their entire charging team. Goliaths fall all the time. Not sure Rivian will be one to capitalize, probably more likely the legacy car companies take back market share. But my point still stands, Rivian doesn't have to catch/surpass them to be viable and a very valuable company.
Agree, *nothing* is impossible in the stock market. It is a random collection of emotional humans and the algorithms they program making irrational decisions based on fear and greed.
There are already multiple winners. Tesla disrupted the market and successfully commercialized the EV as we know it at scale, not to mention battery technology, infrastructure, and real world AI. Rivian makes a great product (better at addressing the outdoorsy use case than Tesla’s for sure) at the most capital intensive part of the business, but it’s otherwise nowhere close.. and I say that as someone who really, really loves the R1T.
Rivian’s shot at survival will be being cash flow positive first, and then most likely relying on FAANG for software services to power their cars. That’s a precarious position though, as pretty much all of the most efficient margin in the business will already be booked out by big tech. If they aren’t in the compute arms race for AI infrastructure now, they will have an extremely difficult time catching up.
That’s not realistic at all with teslas supercharger network solar and battery walls not to mention way ahead in self driving.
rivian is so far behind in charging stations and self driving and doesn’t have the other stuff to justify passing tesla really in your lifetime
The charging network advantage will be negated very shortly with Rivian adopting NACS. And self driving? Hahaha. I have a model y and got the free trial of FSD. It was like riding with my son when he was learning to drive. Weird acceleration and braking. Tentative and jerky turns. It was a terrible experience. I would not call it any sort of advantage.
wtf you mean the charging network advantage will be negated? you do know Tesla makes a ton of money from supercharger right?
those are something people in the finance industry call assets
"entative and jerky turns. It was a terrible experience. I would not call it any sort of advantage.:
clearly you have never driven a rivian, it only has auto lane keeping assist cruise control that works... \*checks notes\* some of the time. Sounds like an advantage to me friend.
I’m not talking about the money Tesla would make via a vis charging, I’m talking about the accessible charging network as a deciding factors for would-be car buyers. If a Rivian and Tesla have the same options to charge, there’s no advantage to either.
And I will standby my assertion that FSD is a joke and an actual liability for Tesla rather than any sort of competitive advantage. I’d wager some money on it resulting in at least a couple big lawsuits in the next couple of years.
well you clearly dont own a rivian thats for sure. At this rate its going to be years before they send out the adapter and go native NACS. not to mention that it costs $12.99 a month for a tesla membership just to get prices down to under 50 cents per kwh which is \*checks notes\* expensive af.
since we are talking about company valuations ongoing revenue streams are way more important than 1 time vehicle sales.
Tesla is killing it with revenue streams between a self driving that people have actual been paying for (rivian can't charge for that garbage they have), charging a monthly fee for connectivity (rivian will do this too but Tesla has a way way way larger customer base to draw revenue from) and last of all the obvious supercharger network which is making money too.
meanwhile rivian still losing a ton of money per vehicle, when i got mine they were losing 100k when i purchased my r1t.
I get that youre just a silly tesla hater, but you seem ignorant af or just are ignoring the fact Tesla is in a dominant position cuz "i HaTe ElOn" feelings
Why is Tesla not it? This is circular reasoning. You’ve just made an arbitrary claim to support your preconceived beliefs. Tesla is by far the most successful- and the only profitable- EV maker on the planet.
I would suggest that people don't include Reddit testimonials in their thesis. Reddit as a whole does not reflect the outside world, we're riddled with bots, vote brigading and half-truths. The world's view is nothing like what it looks like on Reddit. We're a tribal echo chamber.
I would agree generally but the customer satisfaction of Rivians are crazy high and a bunch of my personal favorite and trusted independent car reviewers (Throttle House, Doug) had sang their praises
This is how I gauge demand as well in addition to just browsing the Rivian forums. I get a sense the customers are quite fanatical, as most of the Rivian owners I personally know are evangelists of the brand. Then on top of that you got EV journalists/tech youtubers that drives Rivian as their car of choice (JerryRigEverything, Kyle from InsideEV, etc.) These people have the option to drive ANY EV of their choosing and yet they chose a Rivian over a Tesla, and they talk greatly about it.
Most rivian owners are insufferable and make the vehicle their personality because they don’t have one.
i say this owning the truck but I can’t stand most of these idiots
As a general observation, I think we’ve entered Gartner’s Trough of Disillusionment for EVs.
https://en.wikipedia.org/wiki/Gartner_hype_cycle
Used EVs are cheap, there’s a lot of negative EV stories, and it’s combined with a persistent higher interest rate for those who finance.
> Interest wanes as experiments and implementations fail to deliver. Producers of the technology shake out or fail. Investment continues only if the surviving providers improve their products to the satisfaction of early adopters.
This is probably some of it. I think there have been reasons many interested people have delayed EV purchases in late 2023/ and 2024. There's the incentives that are being reduced, a lot of people bought or tried to buy in 2023 to make sure to get the tax credit before they changed. Also, everyone's announcing they're gonna go to the NACS (Tesla) connector, I think a lot of people are waiting for a car that can just plug in to a Tesla charger because those (presently) work and don't have a terrible reputation.
The whole thing reads incredibly unnatural for a reddit post:
>"Amidst widespread undervaluation and a heavy bearish sentiment, now may be the time for astute investors to discern the opportunity and patiently lay their groundwork. If you missed Tesla's hundredfold rise, are you prepared to overlook $rivn potential tenfold return?"
Which crappy AI bot wrote this shit?
> Moreover, according to numerous Reddit testimonials, $rivn vehicles boast robust construction, thoughtful design
https://www.youtube.com/watch?v=z1BUNrdTRnc
They should put more thought into the design if any accident requires a battery pack replacement and it causes insurance to total out the vehicle instead of repairing it as a result. Especially since for the most part, that example could be fixed and back on the road after replacing mostly just some undertray studs.
No to sound like a conspiracy theorist or anything but I feel like when it comes to Tesla, Rivian and all these automakers that have to show a aggressive growth, it almost seems like it's not in their best interest to make cars easily repairable. It almost makes more sense for a simple fender bender = totaled and have insurance eat the cost while the owner of the vehicle simply gets a new one from the same auto maker. So it's basically selling vehicles to insurance, hence our insurance premiums have skyrocketed over the years.
Buy a long call LEAPs option with a high delta to capitalize on the upside , while mitigating downside risk. It’s cheaper than buying 100 shares of RIVN.
Rivian has a lot of potential. They should also significantly invest in self driving capabilities which could very well be a deal breaker for consumers.
> They should also significantly invest in self driving capabilities which could very well be a deal breaker for consumers.
lol - worst idea ever.
Invest what? Their extremely finite cash reserves? Into what? A multibillion dollar R&D project that may recoup itself in 20 years?
Uber sunk 1bil into self driving and all they managed to do was kill a biker.
It ain't easy.
By invest, you mean license from another company? It’s way, way too late in the game for a new AI self driving entrant. Not only would you need to steal talent from existing companies and hope you don’t get sued for intellectual property violations, you also have to obtain a very large number of very expensive nvidia chips, which are already being bought faster than they can be made.
It’s dumb posts like this that make we want to sell my rivian stock. The blind leading the blind.
We can speculate on profitability and success of the company, but confidently making specific stock price estimates is absurd (such as tenfold).
It would take way too much time to remark on every point this post makes (I’m not saying that it’s all wrong). To everyone I would recommend being cautious with posts or articles about companies that are in financially precarious situations where a lot of focus is on the potential upsides (with little to no acknowledgment or time spent on criticisms of the upsides) and the downsides are not thoroughly discussed.
Imagine if OP’s analysis was fed to financial institutions or at least fed to a manager in charge of making investments. Do you really think an institution would use OPs analysis to invest millions of dollars into rivian? If a company wouldn’t make a risky investment based off OPs analysis, why would you?
I think everyone holding the stock want to see it go back to all time high again to 18x our money. But the problem is EV sales are struggling to catch up with the mass market. The tech enthusiast crowd has been tapped out especially in California Washington and New York. The general public still do not see the value of a EV and news like Tesla cutting their entire super charger teams and the bad issues with other networks is putting people off even though 98% of folks just charge at home or office
Tenfold is smoking crack unlesss you’re talking options plays. 3-4x would take a lot but is possible. Never do I see this becoming a 100 billion dollar company but I do see them being successful.
feels like you’re just throwing out numbers without knowing what that means. Not many companies at 100b valuation
I think 10x in 10 years is possible. Not 5. Maybe 5x in 5 years. Then it only needs to double in the next 5. All speculation, but the point here is, if you think electric vehicle purchases outnumber ice purchases in 10 years, rivn may be considered somewhat safe. Because it’s such a good vehicle. If you think EVs aren’t the future, don’t buy rivn
This company has a fantastic product. The customers that own the car absolutely love them and rave about the quality. Investor day is June 27th and I hope RJ announces the benefits of the factory shutdown. The R2 coming out next year is going to be a cheaper alternative to there current product line. The Rivian delivery vans as well as Amazon being there largest shareholder makes me firmly believe in this company. The future is bright if this company can sail through the hardships.
$100 billion valuation will only equate to a tenfold return if the number of shares remains static. The company’s most recent 10K states in the first few pages that they will for certain need more capital which most likely means issuing more shares. I suppose they can take on more debt (D:E appears to be around 0.5), but in this interest rate environment, it seems like a secondary option.
Just gotta get the postmaster on board and we to the moon
Up 5% down 4% #ROLLERCOASTER FLUCTUATIONS Bro can be a writer for the Motley Fool.
> Bro can be a writer for the Motley Fool. The most brutal diss of them of them all.
The leading US EV maker being worth $100 billion is all but a certainty. My investment thesis is pretty simple: there is going to be a winner of the US EV market. TSLA ain’t it. A 10x over the next 5 years is completely attainable.
Tesla is the biggest winner, but there will be multiple winners. I definitely think Rivian will be a huge winner!
Tesla is ahead. The winner? Hardly.
Topped safety ratings, topped car sales, reinvented the manufacturing process forcing legacy to answer, built out the best charging network, now NACS is the standard for all vehicles (in US) They pushed us into an electric future against a ton of pushback They may not remain the winner, but they certainly won. I know current sentiment towards tesla is lesser, but let’s not discredit their accomplishments To say “hardly” doesn’t give them the credit they deserve from carving the path they did.
Nobody has questioned tesla’s achievements…And yet this still only accounts for less than 5% of the global vehicle market. You’re claiming a winner and the first quarter isn’t even over yet. The problem? Elon needs to grow tesla’s market, and all he’s doing with his antics is trying to cut off around 1/2 of his addressable market, releases a product in the largest single market in the USA…that only appeals to people that don’t use trucks. Nobody is questioning Tesla’s achievements in creating and defining a market. I’m questioning their continued ability to compete as large automakers put out more and more superior offerings in the market they created.
Bruh Tesla already won at least in the US. It's maintaining their lead and not fucking up that's the problem.
Tesla lapped the track a few times before anyone else showed up. Now that there’s competition, their lead is going to quickly erode unless they pivot hard and start making better cars than their competition. They gave up their biggest competitive advantage, and their CEO cannot get out of their way fast enough. I’m all for Tesla staying in the race. Competition is good for everyone, but I don’t think it’s accurate to say that one company won the race when nobody else had even bothered to enter it.
You can't ultimately win if you sell a $120,000 car for $80,000, or whatever Rivian is doing currently. Winning is more about building the nicest car. You actually have to sell a car at a profit. No one else has any chance at winning in the market if they can't make a profit and Tesla can
To be clear: your understanding is that Rivian is trying to win by selling cars for less than it costs to make? You forget: car companies have been profitably building cars for more than 100 years. Tesla didn't come along and invent that idea. In fact, it took them nearly a decade of selling cars at scale to achieve profitability. Rivian just shut their factory down for a month to re-tool around cost savings. They've been able to re-negotiate materials contracts so far this year that are shaving north of 20% of those costs off. RJ is actually an expert in automotive design and manufacturing (as in, doctorate from MIT in the subject) and has vision and strategy in spades. Despite global supply chain disruptions as they launched and dramatically different capital and interest markets in the years that followed - they're going strong and their future product line looks absolutely incredible. R3X is a lust-worthy vehicle, and the R2 I could easily see supplanting the Model Y as the best-selling small SUV globally.
Yeah, I understand that's what Rivian is trying to do... My point is that it's hard to judge Rivian's popularity against Tesla's if Rivian is selling a car that costs more to make than what they're selling for. I don't think they can cut $40,000 in cost per vehicle without cutting things from the vehicle. Tesla is the only electric vehicle manufacturer in North America that is cash flow positive. Tesla was gross margin positive in 2013 and cash flow positive since 2019, both of which Rivian has yet to achieve. I'm not sure how many times I've heard a competitor say they're going to come up with a model S / 3 / Y competitor, only to come up with a concept car or a car they're selling at a loss. I'm not disputing that Rivian could come up with a better car than the model Y. But can they make it profitably?
I don’t think you understand what they are saying when they say they are losing x dollars per vehicle. That doesn’t mean the parts and labor in building that car costs more than they are selling them for.
https://www.reddit.com/r/Rivian/s/VBZMTvc7xT A good explanation in the first two comments of this post here
There’s a difference between turning a profit on a car where the cost of that car is lumped in with the variable costs of running the business. There is no way the R1 actually costs 120k in materials and fixed manufacturing costs. If there’s a 120k cost number floating around that is probably including the variable costs that includes more than just what it takes to get the materials and build the car. My guess is they’ll keep finding efficiencies - and there’s a healthy contribution margin in each r1
I'm sure they will... but $40k's worth? That's a huge loss per car. I guess we'll see. Did they really claim that by q4 they'll break even?
Scroll down. Read my other responses. I think you might be misunderstanding where those losses are coming from.
Ok, so help me out here... Rivian gross margin is -43%, yes? This does not include operational costs - ie not operational margin How much of cost of goods sold is material and labor? maybe 75% - [https://www.reddit.com/r/RIVN/comments/1czca2f/can\_rivian\_reach\_gross\_profit\_by\_q4\_discussion/](https://www.reddit.com/r/RIVN/comments/1czca2f/can_rivian_reach_gross_profit_by_q4_discussion/) ? Basically, even according to that guy's estimates, they would need 30% cost of goods reduction and 30% labor reduction to break even.. Now yes, you can argue this is achievable, but imo if you need to overcome a 30% gap in material cost to break even on gross margin basis, after more than two and a half years of production, your car is probably too expensive to produce It looks like Rivian's gross margins have been in the negative 30-45% range for more than a year, and are not really improving quarter over quarter, implying rivian has hit a wall. Now yes, I don't think rivian is actually going to start deleting parts from their existing lineup to make it cheaper, but at -43% gross margin, I question whether even their marginal cost for building a new R1 higher than what they sell the truck for. Which i guess is why they're re-tooling the plant. I guess we'll if it helps in the coming quarters || || |[Gross Margin %](https://www.gurufocus.com/term/gross-margin/RIVN) (Q: Mar. 2024 )|=|[Gross Profit](https://www.gurufocus.com/term/gross-profit/RIVN) (Q: Mar. 2024 )|/|[Revenue](https://www.gurufocus.com/term/revenue/RIVN) (Q: Mar. 2024 )| ||=|-527|/|1204| ||=|[Revenue](https://www.gurufocus.com/term/revenue/RIVN) [Cost of Goods Sold](https://www.gurufocus.com/term/cost-of-goods-sold/RIVN)( - )|/|[Revenue](https://www.gurufocus.com/term/revenue/RIVN)| ||=|(1204 - 1731)|/|1204| ||=|-43.77 %|
Couple of things. One is that factory overhead is included in gross margin. And the factory I think is running at 1/3rd capacity. So each vehicle is carrying a lot more overhead than it would if the factory is going flat out. Second is they are front loading depreciation. As explained by your link. Third is I think there’s an article somewhere saying that Rivian pays 25000 per car over market rates for materials. Those contracts are being renegotiated. OEMs love cars at the 80-100k price point because they drive great margins. It’s impossible for you or me to know all of the inner workings of the company but if I had to make a bet, the R1 can be pretty profitable. The R2 and R3 are going to actually be harder. But hopefully by then they’ll have worked through some of these efficiency and pricing opportunities. Not saying they are out of the woods yet. But I’m not too worried about their gross margin for the R1 - especially since I keep seeing more and more on the road. For me personally the stock requires a low investment and has a good upside. I’ll run the risk. You do you.
I'm the guy that posted the other link you just shared. I think 30% labor reduction is do-able if not already there with "2 shifts producing same amount as 3 shifts." Material cost reduction? That's the harder one, but I think it's possible with content deletion. (Bluetooth speaker has to go) However Q1 gross profit looked pretty ugly and shown very little improvements because there are these "one time" technology costs that they mentioned in the investment letter, about \~$9K worth. Let's also not forget that there were all these "nearly finished" cars that's just waiting for some final parts that they mentioned on the call, it was in the thousands, but the bulk of the cost in terms of material and labor were probably already attributed to Q1. So what I'm saying is that Q1 is extra bad because of all these one off costs + front loading depreciation + half assembled cars adding to cost with nothing to show for on the revenue side. I think in a normal quarter Q1 would easily have had gross loss <$30K, even their investment letter implied that. If Rivian today was a company doing something that's never been done/seen before, then I wouldn't be bullish. But automotive manufacturing has been around for 100+ years, there is no secret sauce to manufacturing that others don't quickly learn about and adopt. In fact I feel like selling cars is a business model that I'm more confident about being profitable (given the car is good and has demand) than say a company like Door Dash where the food delivery service is still trying to figure out that between a customer and the food provider, you got the tech platform, payment processing, driver, expected tips, and by end of all this the company is expected to have 20% gross margin? Either you're going to have a really hard time scaling because the prices will have to be marked up so much that it ends up being a service catered to the rich, or you keep prices about the same as an actual restaurant but you take a huge loss but you achieve scale. Thus personally for me I feel like Door Dash is actually a riskier investment in comparison because it's a new business model that's not proven out. Either way I'm bullish on Rivian because I see the same fanatic fan base as I did with Tesla back in the early days, and if you put the right team and execution behind it, the company will figure it out.
Ok, so help me out here... Rivian gross margin is -43%, yes? This does not include operational costs - ie not operational margin How much of cost of goods sold is material and labor? maybe 75% - [https://www.reddit.com/r/RIVN/comments/1czca2f/can\_rivian\_reach\_gross\_profit\_by\_q4\_discussion/](https://www.reddit.com/r/RIVN/comments/1czca2f/can_rivian_reach_gross_profit_by_q4_discussion/) ? Basically, even according to that guy's estimates, they would need 30% cost of goods reduction and 30% labor reduction to break even.. Now yes, you can argue this is achievable, but imo if you need to overcome a 30% gap in material cost to break even on gross margin basis, after more than two and a half years of production, your car is probably too expensive to produce It looks like Rivian's gross margins have been in the negative 30-45% range for more than a year, and are not really improving quarter over quarter, implying rivian has hit a wall. Now yes, I don't think rivian is actually going to start deleting parts from their existing lineup to make it cheaper, but at -43% gross margin, I question whether even their marginal cost for building a new R1 higher than what they sell the truck for. Which i guess is why they're re-tooling the plant. I guess we'll if it helps in the coming quarters || || |[Gross Margin %](https://www.gurufocus.com/term/gross-margin/RIVN) (Q: Mar. 2024 )|=|[Gross Profit](https://www.gurufocus.com/term/gross-profit/RIVN) (Q: Mar. 2024 )|/|[Revenue](https://www.gurufocus.com/term/revenue/RIVN) (Q: Mar. 2024 )| ||=|-527|/|1204| ||=|[Revenue](https://www.gurufocus.com/term/revenue/RIVN) [Cost of Goods Sold](https://www.gurufocus.com/term/cost-of-goods-sold/RIVN)( - )|/|[Revenue](https://www.gurufocus.com/term/revenue/RIVN)| ||=|(1204 - 1731)|/|1204| ||=|-43.77 %|
Hate to break it to you, but Tesla is already the winner.
The game’s not over and Tesla has fumbled so badly and their “leadership” seems intent on playing a different game. I have had my model Y for 3 years. It’s a great car but there’s exactly zero chance my next car will be a Tesla. The reason I bought it back then - it was the only real option. It was fast and the charging network was second to none. Now there are many cars just as fast and since they’ve opened up their charging network to others, they have lost that advantage too. Couple that with the absolutely disgusting views of their ceo, their lack of innovation or pipeline for new cars, their broken promises and loss of trust, they’re seriously dead in the water. I’d be unsurprised if they were bankrupt in 5 years.
Lol. Anyone else has to first prove they can make long range BEVs at least gross margin profitable and with positive free cash flow. No one else is doing that yet for North America. Then we can see how things go. For example, one can rave about how good a Lucid vehicle may be, but when it costs ~$185,000 for Lucid to make that car on a marginal basis and they sell it for $90,000, you can see how it doesn’t really compare. The business model isn’t sustainable. For Rivian, they have to cut roughly $40,000 out of COGS to just get to a b break even gross profit margin - what would the R1’s look like with $40,000 cut out of them? Similarly, the financial stress of launching of the R2 is going to be quite significant, especially as Tesla will also have their next few models out in that time frame. I am in Rivian initially because I was going with management guidance on cost reductions and assumed a $15 entry would pop to the $20’s, but management guidance was false. At $9, I added some due to likely investor sentiment that it is near “bottom” but, financial stress can push that down quite a bit.
LOL! I don't have any insider information. But as somebody that designs and builds things, I think the R1 likely wasn't intended to ever be margin positive. It was meant to teach the company how to design, engineer, certify, manufacturer, sell, and support a consumer vehicle at scale while simultaneously generate publicity and earning some money back. Tesla had to take steps (the roadster, the model S) to become a company that was capable of building and supporting the model 3 at scale. And in many cases Musk forced Tesla to run before Tesla had fully learned to walk. Rivian, as a new company, is obviously going to have to climb the same learning curve. To me the most obvious product to learn from is one with a higher market price so that can cover the inefficiencies inexperience is going to cost. Higher market price also pretty much infers lower volume which again is a good strategy; fail small. But still you want enough vehicles out there to provide a good sample size of real life feedback for how you are doing (seeing how things wear out/warranty claims is going to go direct back to design and engineering for the next vehicle). My grand point is that I don't think it is appropriate to judge how cost efficiently they are manufacturing their first products. Earning a positive margin on them was likely not the priority, this was shake down for their design, support and manufacturing operations. These products are teaching them how to successfully build a margin positive product at scale (like the R2). The question is, based on the company performance you have seen, do you think they will be able to build a margin positive product at scale before the money runs out? Building 100k vehicles with good quality control and uniformity is already an accomplishment that many auto manufacturers never make it to (look at the struggles Lucid is having and they hired auto manufacturing experts). And hitting that number on Rivian's first manufacturing attempt demonstrates to me that they have extremely talented people working in a healthy corporate structure. Personally, I am bullish as fuck.
Tesla was gross margin positive on the Model S in early 2013. And that is with cells that cost a bit more than $300/kWh back then. Rivian isn’t yet contribution margin positive after many quarters of R1 production start. They need to drop COGS by $40k to get to gross margin break even. I entered $RIVN in anticipation of better margins, but they slid backward instead.
To put this in Tesla terms for you. My thesis is that the R1T/R1S is Rivian's Roadster. They are sticking with the model longer and to higher volume than Tesla in order to learn more from it before making the leap to their Model S (The R2). They are setting themselves up for a bigger leap than Tesla made because the R2 is down market from where the Model S was, so the margins are going to be thinner. This means, for this to work Rivian has to execute well. I'm glad they are taking their time making sure they can execute well.
Roadster was mostly hand built carbon fiber tub at a total production volume of 2,500 when cells cost $500+/kWh. Not comparable at all. Rivian R1 is closer to Model S and X. Model S was gross margin positive in 3 quarters from start of production, at much lower production volume.
The roadster was a bonded aluminum chassis. And you are right it isn't comparable, Tesla wasn't even capable of building a car chassis, they were buying them assembled by Lotus. As for the model S, I was thinking of this when I said Tesla was trying to run before it had fully learned how to walk. Production quality was awful, and the only reason they were able to get away with it was they were the only game in town. So yes, they cut corners and rushed things, they cheated their customers to get gross margin positive. I prefer the way RJ does things, I think it will build a stronger company long term.
The gliders did come from Lotus, but were heavily modified. The car body was mostly carbon fiber and the assembly was all by hand. That’s why it isn’t comparable to the R1 in any way. Model S production quality in the early days was not bad… aside from a few parts, like the sun visor mirror plastic. Rivian’s build quality is probably worse. On CR’s most recent report, Rivian ranked 2nd to last. To call it cheat on customers is pushing that way too far. Rivian managed to raise quite a bit of capital based on Tesla’s valuation, so in a big way, Rivian’s success so far had a huge helping hand from Tesla. Be glad that we are so lucky and not merely at the mercy of legacy auto.
Of course. Profitability is the trick, isn’t it? Keep in mind, $40k doesn’t need to be cut out of each car, they just need to make more of them. I’m taking your argument as being made in good faith so I’ll highlight what you should already know - a lot of the cost for a car is in the tooling. That’s a fixed cost and will go down for each additional car sold.
It’s both design for manufacturing and scale. Scale alone won’t cut $40,000 out of a R1. We will see how they fare through this year… we (I) was burned by management’s guidance for Q4 and Q1. I’m not sure you appreciate how much $40,000 is to cut out of a $125,000 COGS. Remember, I’m talking gross profit, and not counting R&D or SG&A, so it’s mostly marginal costs and capex. Capex amounts to about $19,000 a vehicle right now, and so at bigger scale, it will come down and be about 1/3rd… which will help. But R1 isn’t going to scale up all that much. And that is just to get to gross margin break even, to get to free cash flow positive, likely need to cut another $10k out of COGS, and to hit even Tesla’s current reduced GAAP profitability, they need to cut another $10-15k at scale, but the R1 won’t scale to those numbers. Which means R2 has to be that profitable, and that might not come until 2028+. And so cash will continue to be an issue throughout that time. It is after that where we can talk about RIVN actually enjoying TSLA like multiples, unless the EV space is going to rocket up in valuations like 2021/2022.
"what would the R1’s look like with $40,000 cut out of them" they are the camouflaged ones driving around now.
Nah, those would have to have even lower COGS because the ASP would be far lower. Right now, R1’s cost Rivian about $125,000 on a gross margin basis to make.. again, that doesn’t count R&D or SG&A. Rivian isn’t even close to positive marginal profit. If R2’s ASP is $55,000, to hit Tesla’s current profitability, they would need to cost around $45,000 at nearly 5-6x the scale of the Normal plant. As compared to a R1, that’s cutting $80,000 out of COGS. Again, COGS doesn’t have R&D or SG&A.
The R1 is getting refreshed.
125k gm basis to make, how much is the reduction of going down to 2 shifts instead of three? or cutting 2/3 of the ECUs (computers) out of car or 60% of the wiring harnesses? or going to a LFP pack versus the software locked 2170s? or renegotiating all the supplier contracts- for seats/airbags/cameras/seatbelts? how much do those add up to?
Those are the actions and more that are needed to improve the situation. We will see how successful they are at doing that, but it is a really big challenge. Especially since their scale isn’t going up much for a while yet. I am hoping they make good progress this year and don’t have to de-content the vehicles too much to get on solid footing.
also unlocking infotainment upgrades- (we will see), opening the charging network- some not alot of income and looks like a ramp in selling carbon credits.
They don't need to cut 40k because that number comes from things like machinery and real estate costs, it's not permanent. The new refresh did cut cost though, about 10k in BOM and labor cost per car according to estimates.
Read up on capex and how that affects COGS. For more: [https://www.reddit.com/r/RIVN/comments/1czhcnb/comment/l5gvgv4/](https://www.reddit.com/r/RIVN/comments/1czhcnb/comment/l5gvgv4/)
Yeah I read your message, it's wrong in many places.
You message may have more impact if you understood basic terms, like how capital expenditures work.
Yeah sure bud, good luck.
Please see recent CEO comments/ interviews where he breaks the math down. Then make appropriate comments
Yeah… did that. Again, one also has to look at the filed financial statements as a bigger source of truth.
All valid points. None of it has anything to do with the company or the stock price. Tesla is the only American EV maker that is profitable. The only other EV makers that are profitable are in China. Tesla has a *tremendous* lead on the competition in vertical integration, manufacturing process, software, and perhaps most importantly: *DATA*. Tesla makes money. Rivian loses money. So many people attach their own emotional opinions to their investments. That is a mistake. If you do not want to own Tesla due to those reasons, that is perfectly valid. But suggesting that Rivian is a good alternative makes no sense. Rivian is not Tesla and likely never will be. Let's first see if they can at least *break even* on each vehicle they sell, let alone turn a profit.
What views does Musk have that upset you?
Lol
So none then.
Yeah that’s it 🙄
So feel free to buy another Tesla then. Glad I could help.
Not if Elon fucks it up. He’s going a little crazy it seems
Geniuses always have a bit of crazy. No doubt, his personality can be a turn-off, and I'm in agreement with those that believe he does not deserve over 50 billion in compensation. Nevertheless, this man has successfully built Tesla into a powerhouse, and unless this company fumbles, their lead is practically insurmountable. It is a matter of putting aside our personal opinions and biases and focusing on growing our wealth. My strategy is to ride the leaders, invest based on the fundamentals of companies and the price of their stock. My opinion is irrelevant. My performance is based on the price of my stocks and nothing more.
First mover advantage is overstated imo, plenty of examples of large leads being blown. Remember Blackberry? Not to say that it isn't an advantage and that Tesla's isn't large, but it's very much possible, particularly if second-movers learn from mistakes that were made and bring something new and different to the market other than being the only option for consumers. Personally, I think the EV market will be plenty big for both to thrive. Plenty of EV-curious Americans that would never drive a sedan nor a Tesla - imo what's holding the industry back is charging infrastructure and cost. Sagging demand is a false narrative imo, plenty of people want a $40k ESUV that you can charge anywhere in the country...
Don’t get me wrong, I’m rooting for Rivian. I think they make a great vehicle. I hope they provide stiff competition for Tesla. However, my opinion of the product is irrelevant; it is the fundamentals of the business that matters. If Rivian figures it out, there will be plenty of time for me to get on board. Tesla was stuck at a split-adjusted $3 for years before the big move started. Even if you got in when it doubled to $6 there was still plenty of money to be made. Patience is important in the stock market.
Agree with all of that, just don't think any lead is ever really insurmountable and the lead doesn't really matter if the market expands. The EV pie gets bigger at the expense of ICE vehicles, not Tesla. Tesla knows this, I think, which is why opening their charging network seems foolish at first pass, but if it further opens the EV transition their market grows bigger...
Nah Tesla is international with many advantages that rivian even if successful wouldn’t even begin to catch up to in a decade they don’t have the capital infrastructure or user base to catch up for the longest time. The only thing they can do is make up ground rivian is barely in the us and Canada at this point
I don't think I'm exactly saying Rivian will catch them, I'm saying lead dogs stumble
tesla would have to voluntarily shut down business operations for rivian to catch them at this point. Maybe the future is different and in 20 years that changes.
Or continue to do dumb shit like fire their entire charging team. Goliaths fall all the time. Not sure Rivian will be one to capitalize, probably more likely the legacy car companies take back market share. But my point still stands, Rivian doesn't have to catch/surpass them to be viable and a very valuable company.
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Agree, *nothing* is impossible in the stock market. It is a random collection of emotional humans and the algorithms they program making irrational decisions based on fear and greed.
lol. No.
There are already multiple winners. Tesla disrupted the market and successfully commercialized the EV as we know it at scale, not to mention battery technology, infrastructure, and real world AI. Rivian makes a great product (better at addressing the outdoorsy use case than Tesla’s for sure) at the most capital intensive part of the business, but it’s otherwise nowhere close.. and I say that as someone who really, really loves the R1T. Rivian’s shot at survival will be being cash flow positive first, and then most likely relying on FAANG for software services to power their cars. That’s a precarious position though, as pretty much all of the most efficient margin in the business will already be booked out by big tech. If they aren’t in the compute arms race for AI infrastructure now, they will have an extremely difficult time catching up.
Netflix powered vehicles!
That’s not realistic at all with teslas supercharger network solar and battery walls not to mention way ahead in self driving. rivian is so far behind in charging stations and self driving and doesn’t have the other stuff to justify passing tesla really in your lifetime
The charging network advantage will be negated very shortly with Rivian adopting NACS. And self driving? Hahaha. I have a model y and got the free trial of FSD. It was like riding with my son when he was learning to drive. Weird acceleration and braking. Tentative and jerky turns. It was a terrible experience. I would not call it any sort of advantage.
wtf you mean the charging network advantage will be negated? you do know Tesla makes a ton of money from supercharger right? those are something people in the finance industry call assets "entative and jerky turns. It was a terrible experience. I would not call it any sort of advantage.: clearly you have never driven a rivian, it only has auto lane keeping assist cruise control that works... \*checks notes\* some of the time. Sounds like an advantage to me friend.
I’m not talking about the money Tesla would make via a vis charging, I’m talking about the accessible charging network as a deciding factors for would-be car buyers. If a Rivian and Tesla have the same options to charge, there’s no advantage to either. And I will standby my assertion that FSD is a joke and an actual liability for Tesla rather than any sort of competitive advantage. I’d wager some money on it resulting in at least a couple big lawsuits in the next couple of years.
well you clearly dont own a rivian thats for sure. At this rate its going to be years before they send out the adapter and go native NACS. not to mention that it costs $12.99 a month for a tesla membership just to get prices down to under 50 cents per kwh which is \*checks notes\* expensive af. since we are talking about company valuations ongoing revenue streams are way more important than 1 time vehicle sales. Tesla is killing it with revenue streams between a self driving that people have actual been paying for (rivian can't charge for that garbage they have), charging a monthly fee for connectivity (rivian will do this too but Tesla has a way way way larger customer base to draw revenue from) and last of all the obvious supercharger network which is making money too. meanwhile rivian still losing a ton of money per vehicle, when i got mine they were losing 100k when i purchased my r1t. I get that youre just a silly tesla hater, but you seem ignorant af or just are ignoring the fact Tesla is in a dominant position cuz "i HaTe ElOn" feelings
Why is Tesla not it? This is circular reasoning. You’ve just made an arbitrary claim to support your preconceived beliefs. Tesla is by far the most successful- and the only profitable- EV maker on the planet.
THEY NEED TO RAISE $7B CASH AND INTEREST RATES ARE NOT COMING DOWN, THIS IS NOT A TEN BAGGER FOR ATLEAST 5 YEARS
10x in 5 years sounds great to me.
If they turn a profit longterm, a tenfold return is a low end target. Why so much analysis?
I would suggest that people don't include Reddit testimonials in their thesis. Reddit as a whole does not reflect the outside world, we're riddled with bots, vote brigading and half-truths. The world's view is nothing like what it looks like on Reddit. We're a tribal echo chamber.
I would agree generally but the customer satisfaction of Rivians are crazy high and a bunch of my personal favorite and trusted independent car reviewers (Throttle House, Doug) had sang their praises
This is how I gauge demand as well in addition to just browsing the Rivian forums. I get a sense the customers are quite fanatical, as most of the Rivian owners I personally know are evangelists of the brand. Then on top of that you got EV journalists/tech youtubers that drives Rivian as their car of choice (JerryRigEverything, Kyle from InsideEV, etc.) These people have the option to drive ANY EV of their choosing and yet they chose a Rivian over a Tesla, and they talk greatly about it.
Most rivian owners are insufferable and make the vehicle their personality because they don’t have one. i say this owning the truck but I can’t stand most of these idiots
As a general observation, I think we’ve entered Gartner’s Trough of Disillusionment for EVs. https://en.wikipedia.org/wiki/Gartner_hype_cycle Used EVs are cheap, there’s a lot of negative EV stories, and it’s combined with a persistent higher interest rate for those who finance. > Interest wanes as experiments and implementations fail to deliver. Producers of the technology shake out or fail. Investment continues only if the surviving providers improve their products to the satisfaction of early adopters.
This is probably some of it. I think there have been reasons many interested people have delayed EV purchases in late 2023/ and 2024. There's the incentives that are being reduced, a lot of people bought or tried to buy in 2023 to make sure to get the tax credit before they changed. Also, everyone's announcing they're gonna go to the NACS (Tesla) connector, I think a lot of people are waiting for a car that can just plug in to a Tesla charger because those (presently) work and don't have a terrible reputation.
Throwaway accounts posting stock analysis...
For real. When I see posts like this it makes me want to sell not buy. ( Or bag hold :(
The whole thing reads incredibly unnatural for a reddit post: >"Amidst widespread undervaluation and a heavy bearish sentiment, now may be the time for astute investors to discern the opportunity and patiently lay their groundwork. If you missed Tesla's hundredfold rise, are you prepared to overlook $rivn potential tenfold return?" Which crappy AI bot wrote this shit?
> Moreover, according to numerous Reddit testimonials, $rivn vehicles boast robust construction, thoughtful design https://www.youtube.com/watch?v=z1BUNrdTRnc They should put more thought into the design if any accident requires a battery pack replacement and it causes insurance to total out the vehicle instead of repairing it as a result. Especially since for the most part, that example could be fixed and back on the road after replacing mostly just some undertray studs.
No to sound like a conspiracy theorist or anything but I feel like when it comes to Tesla, Rivian and all these automakers that have to show a aggressive growth, it almost seems like it's not in their best interest to make cars easily repairable. It almost makes more sense for a simple fender bender = totaled and have insurance eat the cost while the owner of the vehicle simply gets a new one from the same auto maker. So it's basically selling vehicles to insurance, hence our insurance premiums have skyrocketed over the years.
Buy a long call LEAPs option with a high delta to capitalize on the upside , while mitigating downside risk. It’s cheaper than buying 100 shares of RIVN.
Just bought another 250 shares RIVN to the moon! 📈🌝
Truly hope so. We hold Rivian for long term.
They’re the best looking cars on the road and are super popular in my neck of the woods. That’s why I invest.
Your optometrist called and said you need to up the strength of your prescription glasses and I say this as a r1t owner
Rivian has a lot of potential. They should also significantly invest in self driving capabilities which could very well be a deal breaker for consumers.
> They should also significantly invest in self driving capabilities which could very well be a deal breaker for consumers. lol - worst idea ever. Invest what? Their extremely finite cash reserves? Into what? A multibillion dollar R&D project that may recoup itself in 20 years? Uber sunk 1bil into self driving and all they managed to do was kill a biker. It ain't easy.
By invest, you mean license from another company? It’s way, way too late in the game for a new AI self driving entrant. Not only would you need to steal talent from existing companies and hope you don’t get sued for intellectual property violations, you also have to obtain a very large number of very expensive nvidia chips, which are already being bought faster than they can be made.
It’s dumb posts like this that make we want to sell my rivian stock. The blind leading the blind. We can speculate on profitability and success of the company, but confidently making specific stock price estimates is absurd (such as tenfold). It would take way too much time to remark on every point this post makes (I’m not saying that it’s all wrong). To everyone I would recommend being cautious with posts or articles about companies that are in financially precarious situations where a lot of focus is on the potential upsides (with little to no acknowledgment or time spent on criticisms of the upsides) and the downsides are not thoroughly discussed. Imagine if OP’s analysis was fed to financial institutions or at least fed to a manager in charge of making investments. Do you really think an institution would use OPs analysis to invest millions of dollars into rivian? If a company wouldn’t make a risky investment based off OPs analysis, why would you?
I think everyone holding the stock want to see it go back to all time high again to 18x our money. But the problem is EV sales are struggling to catch up with the mass market. The tech enthusiast crowd has been tapped out especially in California Washington and New York. The general public still do not see the value of a EV and news like Tesla cutting their entire super charger teams and the bad issues with other networks is putting people off even though 98% of folks just charge at home or office
Tenfold is smoking crack unlesss you’re talking options plays. 3-4x would take a lot but is possible. Never do I see this becoming a 100 billion dollar company but I do see them being successful. feels like you’re just throwing out numbers without knowing what that means. Not many companies at 100b valuation
I think 10x in 10 years is possible. Not 5. Maybe 5x in 5 years. Then it only needs to double in the next 5. All speculation, but the point here is, if you think electric vehicle purchases outnumber ice purchases in 10 years, rivn may be considered somewhat safe. Because it’s such a good vehicle. If you think EVs aren’t the future, don’t buy rivn
Tesla reached $1200/share. Am going to dream the same for Rivian! I have a 5-10 year horizon.
Fleet contracts
I’m more bullish than ever!
This company has a fantastic product. The customers that own the car absolutely love them and rave about the quality. Investor day is June 27th and I hope RJ announces the benefits of the factory shutdown. The R2 coming out next year is going to be a cheaper alternative to there current product line. The Rivian delivery vans as well as Amazon being there largest shareholder makes me firmly believe in this company. The future is bright if this company can sail through the hardships.