Will Rivian Make It?

[CyberGus]

Amazon owns 20% of Rivian. You know...Amazon? They were the original "cash furnace". In the early days of expansion, analysts joked that their business model was to sell $100 bills at a 10% discount, but make it up in volume. Who's laughing now?

I think Bezos has the patience (and the money lol) to play the long game.

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[rr6013]

I think Bezos has the patience (and the money lol) to play the long game.

Well that settles it. Rivian’s are sold online off the AMAZON platform. Amazon Prime need only apply.

 

[Crissa]

You can't compare profit to total expenses, you have to compare revenue to expenses, and then future revenue, because costs are now, revenue is later.

They aren't intending to sit at 25k trucks forever.

-Crissa

 

[Ogre]

Rivian makes really good trucks, and not-so-amazing factories to build those trucks. They also have a massive cost structure.

I think their cost to convert raw materials into a truck is higher than most big auto companies and much higher than Tesla. They also don’t have the advantage of scale so they are likely paying 150% - 200% what Tesla does per kWh for cells.

How do they fix these things? If Rivian’s management doesn’t have a plan to increase automation and get their cell supply locked in at a decent price, they are not going to survive.

Rivian management seems to understand they have battery supply issues, but they don’t quite seem to realize how far behind they are on manufacturing.

People like to compare them to early Tesla, but they won’t have the luxury of 10 years with almost no competition.

 

[firsttruck]

Rivian makes really good trucks, and not-so-amazing factories to build those trucks. They also have a massive cost structure.

I think their cost to convert raw materials into a truck is higher than most big auto companies and much higher than Tesla. They also don’t have the advantage of scale so they are likely paying 150% - 200% what Tesla does per kWh for cells.

How do they fix these things? If Rivian’s management doesn’t have a plan to increase automation and get their cell supply locked in at a decent price, they are not going to survive.

Rivian management seems to understand they have battery supply issues, but they don’t quite seem to realize how far behind they are on manufacturing.

People like to compare them to early Tesla, but they won’t have the luxury of 10 years with almost no competition.

Rivian has already been around over 12 years so giving them 10 more years would be over 22 years. Rivian has had more time than pre Model 3 Tesla and Rivian despite starting later thus having newer battery tech available, also help from Ford & Amazon, Rivian has done much worse than Tesla and looks like Rivian will continue to under perform where Tesla was at in similar time frame.

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Tesla was incorporated in July 2003 by Martin Eberhard and Marc Tarpenning as Tesla Motors but I do not count this 7 months before first outside investment because no significant capital and only a couple employees seem to have been available during that time.

Between Elon's first investment at Tesla (February 2004) thru Dec 2013 (10 years), Tesla had shipped 2 completely different models ( Roadster, Model S ) of over a total 27,418 vehicles (2,418 Roadsters + over 25,000 Model S).
https://en.wikipedia.org/wiki/Tesla,_Inc.

TESLA MOTORS, INC. ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2013
Model S Model S is a fully electric, four-door, five-adult passenger sedan that offers compelling range and performance with zero tailpipe emissions. We began customer deliveries in June 2012. As of December 31, 2013, we had delivered over 25,000 Model S vehicles.
https://www.sec.gov/Archives/edgar/data/1318605/000119312514069681/d668062d10k.htm

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Robert Joseph "R.J." Scaringe does not compare to Elon Musk. "R.J." Scaringe might not have had any major real world business experience before Rivian.

Remember Elon Musk had achieved two highly successful businesses before he started Tesla & SpaceX.

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RJ Scaringe - Rivian Chief Executive Officer · Rivian 15 jun 2009
https://www.linkedin.com › rj-scari...

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Mainstream Engineering Spins off US Auto Company Avera Motors.
Mainstream Engineering, a Rockledge-based research, development and manufacturing firm, announces the spin-off of its automotive division and the creation of an independent automotive company known as Avera Motors. Avera is led by its founder RJ Scaringe, a Brevard county native with a PhD in mechanical engineering from Massachusetts Institute of Technology (MIT).
May 24, 2010 – Rockledge, Florida.
https://cartype.com/pages/5028/avera

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Avera Motors changes name to Rivian Automotive
Florida automaker Avera announces a company name change to Rivian Automotive.
Company CEO R.J. Scaringe blogged about the name change.
By Suzanne Ashe
March 16, 2011
https://www.cnet.com/roadshow/news/avera-motors-changes-name-to-rivian-automotive/

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Rivian Automotive's Robert Joseph "R.J." Scaringe: Faces of Technology
Hear from Rockledge-based Rivian Automotive's CEO, Robert Joseph "R.J." Scaringe, as he talks about how his company is reinventing the way vehicles are designed and manufactured to provide extremely efficient performance vehicles at an affordable price.
Dec 29, 2011
Florida High Tech Corridor

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[Ogre]

Rivian has already been around over 12 years so giving them 10 more years would be over 22 years.

Yep. Cracks me up when Rivian gets called a startup. I don’t understand why Scaringe has lasted as long as he has

Mostly my point was that the market is vastly different at this point then it was when Tesla launched. There was a window of opportunity for launching EV companies and that window… seems to have closed a couple years before Rivian got their first vehicle out the door.

Tesla would likely not succeed if it were launched into today’s market. I don’t think Musk would have launched a company which is so close to mainstream adoption already though.

 

[Crissa]

Tesla was founded in 2003, the Model 3 didn't manage to escape production hell until late 2018, 2019.

Companies can run in startup mode for a long, long time. Amazon was founded in 1994 and remained acting like a startup for twenty years. https://www.macrotrends.net/stocks/charts/AMZN/amazon/gross-profit

Until the company is self-sustaining, it is still a startup.

-Crissa

 

[Ogre]

Tesla was founded in 2003, the Model 3 didn't manage to escape production hell until late 2018, 2019.

Companies can run in startup mode for a long, long time. Amazon was founded in 1994 and remained acting like a startup for twenty years. https://www.macrotrends.net/stocks/charts/AMZN/amazon/gross-profit

Until the company is self-sustaining, it is still a startup.

-Crissa

I find that definition weird and a bit arbitrary. Sort of eliminates cautious founders who achieve profitability early on.

If I build a company that is profitable in 6 months (perhaps a software company) is that not still a startup?

After 20 years people might retire from Rivian, never having worked another job… but it’s still a startup?

 

[Crissa]

If I build a company that is profitable in 6 months (perhaps a software company) is that not still a startup?

Are you taking the profit, or seeking more investment to expand? If the former, you have founded a business. The the latter, you have proven a startup.

-Crissa

 

[firsttruck]

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Tesla was incorporated in July 2003 by Martin Eberhard and Marc Tarpenning as Tesla Motors but I do not count this 7 months before first outside investment because no significant capital and only a couple employees seem to have been available during that time.

Between Elon's first investment at Tesla (February 2004) thru Dec 2012 ( 9 years), Tesla had shipped 2 completely different models ( Roadster, Model S ) of over a total 5,518 vehicles (2,418 Roadsters + over 3,100 Model S).
https://en.wikipedia.org/wiki/Tesla,_Inc.

First deliveries of Model S started from the Tesla Factory in Fremont, California, in June 2012.

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Tesla Model S - Over 2,400 Sold, 2,750 Built In Last Quarter Of 2012
Feb 20, 2013
By: Jay Cole
https://insideevs.com/news/317209/tesla-model-s-over-2400-sold-2750-built-in-last-quarter-of-2012/

.....
For the fourth quarter 2012, Tesla sold 2,400 all electric sedans, bringing the 2012 yearly. total to 2,650. (Tesla sold 253 Model S Sedans in Q3 2012)

Overall the company said they produced over 2,750 cars in the three months, and over 3,100 for the year ( June - Dec 2012, total 7 months ).

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[Ogre]

Are you taking the profit, or seeking more investment to expand? If the former, you have founded a business. The the latter, you have proven a startup.

-Crissa

Your definition of a startup seems to relate more to willingness and ability to raise outside capital alone. I find that idea kind of nonsensical. Lots of independents never raise outside capital or finance their business through traditional small business loans.

SpaceX just recently did a capital raise to expand for example. I don’t think people would describe SpaceX as a startup. Yet it isn’t much older than Rivian.

 

[TyPope]

If Rivian is planning to produce 25000 (a year ? ) at say 10% profit = 250 milion. By that time, they would have burned 6 BILLION at the current rate.

Leaving them with 9 Billion. One and a half more years of funds before they run out by the end of 25.

They have a new factory coming online in 2026.

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They will need to drastically stop the expenses and lift production to over 100,000 and show quick signs of ramping from there. Time flies.

But they only have, 98000 back orders !

I say to business aspirants,,, your family and friends are not enough.

The Amazon 100,000 vans on order. I would bet are at a bargain for Bezos. This is not business !!!

Their very high RD would surely be to frantically develop a new mass market product.

We saw what Dyson did. They are walking a fine line.

Their burn rate includes capital expenditures and will not continue at the level it is. Surely not once they've finished paying for the Georgia plant. Their main factory is built so a "per-unit" analysis of cost vs sales price when including those expenses makes it look like a bad business picture without taking into account how the costing is calculated. As long as the material costs, touch labor, and building maintenance/overhead (elect., gas, marketing, etc.) expenses per vehicle are lower than the sale price, they'll be fine.

 

[Crissa]

Your definition of a startup seems to relate more to willingness and ability to raise outside capital alone. I find that idea kind of nonsensical. Lots of independents never raise outside capital or finance their business through traditional small business loans.

SpaceX just recently did a capital raise to expand for example. I don’t think people would describe SpaceX as a startup. Yet it isn’t much older than Rivian.

SpaceX is still in startup mode, yes.

It's not nonsensical, it's just a different definition. There's no hard and fast lines.

-Crissa

 

[agsteane]

If Rivian is planning to produce 25000 (a year ? ) at say 10% profit = 250 milion. By that time, they would have burned 6 BILLION at the current rate.

Leaving them with 9 Billion. One and a half more years of funds before they run out by the end of 25.

They have a new factory coming online in 2026.

======

They will need to drastically stop the expenses and lift production to over 100,000 and show quick signs of ramping from there. Time flies.

But they only have, 98000 back orders !

I say to business aspirants,,, your family and friends are not enough.

The Amazon 100,000 vans on order. I would bet are at a bargain for Bezos. This is not business !!!

Their very high RD would surely be to frantically develop a new mass market product.

We saw what Dyson did. They are walking a fine line.

There's no point basing interest on pre-orders. Tesla has a lot of enthusiasts, others not so much. But if the Rivian was making vehicles today, they would sell them all. That'll be the case as the ramp production (assuming the vehicle is good, which people on this thread indicate it is).

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