Rivian: Will They Prove Themselves or Fall Flat?

Rivian is a young, up and coming EV manufacturer that has a lot to prove right now. In this video, we'll take a look at the company, their growth rate, and what the future holds for Rivian.

If you're interested in EV's and want to know more about Rivian, then this video is for you! We'll discuss the company, their product lineup, and what the future holds for Rivian. This information is important, so be sure to check it out!

A portion of this video is sponsored by The Motley Fool.

[williamelkington]

A number of your concerns are valid, and I share your focus on COGS, operating profit/loss, ramp rate, and expenses such as R&D. Please remember--when considering cash burn rate--that Rivian introduced four new vehicle models last year, in its first full year of production as a company. I could say much more about this and its unprecedented nature in automotive history, but I want to move on to some specific things you said that seem off-base or flat out erroneous. First, you refer to the 2022 Q4 shareholder letter, when in fact we have the 2023 Q1 shareholder letter in our hands today. Why reach back to last year? Your information doesn't seem up to date. Second, the company leadership announced that orders information would no longer be reported six months ago, and they have explained their reasons on several occasions--both in earnings calls and at an investor conference this past quarter. You may not like their decision or their rationale, but this is by now a dead issue (or should be) for investors. Third, the latest information that I have is that the Normal facility is scaled to manufacture 150K vehicles, not 200K vehicles. If you have information that the Normal facility is capable of 200K vehicles per year, I'd like to see it. Fourth, in the last earnings call, leadership promised positive gross margin in the second half of 2024, something your discussion here does not seem to recognize. Now, we do need to see the trend heading with all deliberate speed in that direction, and we do need to assess whether we believe them. But implying that we have not received guidance in this area is contrary to fact. Fifth, you say that $80K is "around double what you can get for an internal combustion engine vehicle." Well sure, if you get to select your comparable ICE vehicle whimsically--that is to say, if you choose to compare the Rivians to vehicles that aren't really comparable at all. If you are constrained in your selection by functionality, design, materials, performance, and customer service, I'd say you are flat out wrong. Consider the Ford Raptor R and the Ram TRX and the pricing of well-equipped versions of these vehicles, as ICE comparables for the R1T. Consider the Grand Wagoneer and 7-passenger Range Rover models as comparables for the R1S. I think you will find comparable pricing or even that the Rivian vehicles may have significant pricing advantages at similar trim levels in a few of these ICE vehicles.

Yes, we do need to know more about the Georgia facility and the financial arrangements with the state of Georgia, but that is tied up in the courts for now, and nobody will be able to say with certainty what will happen there. Will Rivian need more cash? Yes. Where will it come from? We don't know yet. Is cash available to get Rivian through the next few years and into production of the R2 platform vehicles? Yes. Where will it come from? We don't know.