Very interesting video. I am a senior automotive development engineer who was highly courted to join the Rivian development team when they were located in Michigan. Though the opportunity was tempting, I did not believe in the viability of such an expensive truck that had all the limitations of EVs. I do not believe that they will become more mainstream until there is a viable charging infrastructure available and the costs come down to the ordinary buyer. Until then, EVs will be a very limited market. You now have all the realities of real world experience coming to fruition, particularly in cold weather markets. I'm glad I stayed with my current employer.
Really glad you enjoyed the video and thank you for sharing your experience. Any thoughts on BYD and their low-cost EVs? We covered that in a video you might like titled "Chinese EVs Dominate": th-cam.com/video/D0jJG0Sego4/w-d-xo.html
@Nanalyze I have not seen that video, but I will check it out. The cost advantage of the Chinese is certainly a big plus for them. However, there is still the infrastructure issue and the everyday limitations of EVs that many people don't want to accept at this time. If it is cheap but does not meet your needs or expectations, that is a hard sell for many people. I also think the Chinese could very well be dealing with future tariff issues, especially if Trump gets into office. They may build a plant in Mexico, but I think it will be tough sledding for them to make a dent in the US market. Build quality and unknown reliability would be on the minds of future customers, too. I still think the lack of a national infrastructure is the biggest hurdle for EVs. To get that would require the federal and state governments to work together with utilities. We all know how that would go. Add in the time to get that done and you're talking years and billions of dollars. EV manufacturers could not hang on that long nor would customers be that patient to wait that long. I am all for customer choice, and if there truly is a viable market for EVs, good companies will sniff it out and provide that product. However, it must be at a reasonable price and be no worse to maintain and operate than an ICE vehicle without government subsidies. I have not even addressed insurance costs or the impact that these heavier vehicles have on our roads. We'll see what happens. Keep up the good work!
@@charlespapineau5428 Good info from someone who has knowledge working in the vehicle space. Just a question and a factual point. Many EVs in North America are moving to the North American Standard in 2024, which is Tesla's supercharger technology. Does this change your thesis about a weak charging infrastructure since 93% of people will charge at home (I understand that many people live in apartments or in cities without home charging capability)? My factual point: Kia EV6 ,Tesla Model 3 and many EVs weigh the same or less than Ford F150, yet we never hear about impact on roads from pickup trucks. A quick google search on weight of each vehicle is easy to find. I appreciate your thoughts.
Hey Joe, kinda a mirror version of this Rivian piece, I got an interesting video idea to think about. RIVN is a low quality company, and naturally the price goes down and there are plenty of people holding the bag. 💰 But given there's a lotta good companies out there, I was wondering if you'd consider something about the psychology of averaging *up.* 🤔 Buying the dip and averaging down is pretty well-known, but I've never heard anyone discussing averaging *up* in a quality company, which I think people may be even more hesitant to do. Especially given interest rate cuts may happen this year and drive all our stocks up. And inevitably, we invest in our stocks because we WANT them to go up, but ironically and naturally don't want to increase our cost basis. 🤷♀️
Good thoughts here. So we manage two strategies - disruptive growth and dividend growth. For dividend growth, we think dollar-cost-averaging over very long periods of time with dividends reinvested works quite well. Managing established portfolios can employ a set-and-forget strategy or trim runners and reinvest in depressed positions. For tech investing, we use simple valuation ratio instead of price. So while a price may have increased a lot, it may actually be "cheaper" than before. However, we cap the amount we invest into them to avoid putting too much into any single stock. You make a very good point about how nobody wants to increase their costs basis. It's very uncomfortable psychologically. Not sure there's an entire video we could do on that but it's on my radar now. Joe P.
You didn't mention that Amazon has a 16% share in the company worth over 3 Billion. I would imagine that they might step in or help raise funds if they were going to become bankrupt. Great video by the way, some excellent points to consider.
@@brianwest7344 Yes but usually when they don't work it's because people just don't like the product. If they have a best seller but it's losing money, historically they subsidize it until they can find a way to make it profitable.
There's a saying: Every day you own a stock is like you are buying it again. It can be a little more complicated if you are up on a position with short or long-term capital gains considerations but for anybody that is in the red on a position, it's important not to get trapped by the sunk cost fallacy and to be able to make the decision with as little emotion as possible about whether to sell and put the money somewhere potentially better or not.
Good comment here. It's also important to employ some risk management before entering a position so you have conviction. Tech stocks are very volatile. If you truly believe in Rivian's potential, then the depressed share prices are a godsend. We just never thought it was a good idea to invest in the company at any price or time, and they appear to be on shaky ground now. They might pull out of this, but it seems more likely they'll need to raise money and not have many good options.
I hope they make it. I love my R1T, and RJ has a good head on his shoulders. I think they will show positive gross margins by end of '24 and then raise capital to fund the R2 build. The R2S will be the perfect alternative to the model Y for those who prefer an outdoorsy SUV to a sporty SUV. If priced in line with the Y, I could see them selling 500k annually. Time will tell!
Hopefully they pull through. Glad to hear you're enjoying their product! The trucks do look pretty cool - lots of them in the Pacific Northwest. Joe P.
They have outstanding vehicles that consumers want. I see more of them out there these days. And R2/R3 are exciting. The stock could have big upsides as they ride out the year. Hopefully interest rates come down a bit and demand picks up. It's going to come to execution and a bit of luck from the economy front.
The vehicles aren't the problem, it's the company that can't produce them at a profit. Hope and $6 might get you 6-inch cold cut combo at Subway these days. We're looking at how the company looks today and it's not good.
Good analysis, sir. I don’t think you’ll have to wait until fourth quarter earnings or positive gross profit to tell how this will go. Retooling a plant this late in the game is no easy task. The 2nd quarter call will give you some idea on how well Rivian recuperated from the production pause. I won’t go too deep but people are overlooking this. Regardless of the changes to reduce materials costs, if you can’t hit the ground running faster than Usain Bolt they are already doomed. They know this as well. Final note, is something someone already mentioned, the EV woes in general also should not be overlooked for the short term. I don’t need to get into a political debate over the merits of reduced emissions but it will eventually have to happen. However, currently the math ain’t mathing, I would like to hear your thoughts in a video on what your take is on Toyota’s slow build into the EV world. Coming from manufacturing background I have a hard time arguing with the premier car company (and the manufacturing gold standard) on the planet . When Akio Toyoda says it’s overhyped it’s hard to not hear his argument and agree.
Thank you! Very good points you raises here. China's EV push into emerging markets (places where TCO really matters to people) is what we're watching closely. They've managed to drop prices enough to make it truly cheaper to operate electric than gas-powered (it seems). We covered that recently in this piece: th-cam.com/video/D0jJG0Sego4/w-d-xo.html
That's an excellent question. You know management is giving them the regular rah-rah speeches, so they probably see success is still feasible. It certainly can be, they just need to show some real progress in 2024. How "modest" those positive gross margins will be will say a lot.
Rivian is coming along when there’s plenty competition not just from other EVs. Tesla had to lower its prices in this environment. Rivian got massive headwinds
Thanks...Definitely confirmed my suspicions.... now trading under 11$... Market Cap is about its cash on hand. I was hoping you would revisit ABCL, PL & RNLX in future posts... THx
You're most welcome Frank. We'll look to do an AI Drug Disco update at some point (both ABCL and RXRX) and a PL article or video will be out soon once their year-end results come out. RNLX is just to small to even mess with anymore.
Just bought some, mostly as speculation. Price seems low. They will present new product soon and margins might improve over the year. Which might push the stock back up even short term. Especially if market in general does well. For the same reason (no reason) it was once valued at 120 it might be valued at 50 again. Long term I also don't see it dead.
We're investors, not speculators ;) Always try to use valuation ratios when setting price targets otherwise they are just arbitrary numbers. 2024 will be a pivotal year. Let's hope they turn the gross margin ship around as that's a key next milestone.
Great analysis but ZERO mention on the EDV part of the business? Why did you leave that very important part out…even when you mentioned their production shortfall in Q4 you skipped the Amazon factor…why? So because of that I question your post…
R2 would be very important for rivian to survive and price point with 40k start you would have a winner if the range is close to 250 . And I would be see 1 million registrations in 1 quarter and I expect Detroit, European or Apple to make a play for it late this year or next year . Price point is very crucial if you do volume and all your problems will go away . If R2 impress the everyone we are gone see few large buys into stock and to Tesla to succeed you need a strong number 2 . If not it’s not gone end up well for both .
We've all been in a similar situation and looked for guidance. However, you need to make those decisions yourself. That's one of the biggest steps towards becoming a better investor. Making decisions with conviction and not looking back.
What we've talked about today is really nothing novel. This company is trying to do something extremely difficult. Odds are against them based on a simple analysis of the numbers as we've done today. Deciding to invest or continuing to hold is a question of risk tolerance. We're very risk-averse and this isn't something we'd ever get involved in to begin with because of those gross margins. It's always important we learn as we go along.
Right? The fact some had no revenues and still achieved such valuations is incredible. Compared to other EV companies Rivian actually executed pretty well. It's just that crossing the "production chasm" is a lot harder than it looks.
I invested in Rivian over a year ago in hopes that they would get their production issues sorted out and focus on scaling, but after recent interviews with RJ Scaringe he seems to have no solid plan to reduce Rivian's cost per vehicle and the CFO also is just as dumb founded, I've never seen management so brazen before. I will consider reinvesting in them maybe a few years down the line because I do believe Rivian (despite manufacturing and scale issues) produces excellent vehicles that are innovative in design and performance, but right now I bit the loss and dumped all my shares a few weeks ago
The video specifically mentioned the last video we published on the Amazon Rivian relationship (th-cam.com/video/7TSq7dJdeU8/w-d-xo.html). Strange that you didn't see that. ;)
Thanks for a clear, insightful video. Alas, I have a very hard time seeing how Rivian can slice $30,000 to $40,000 in costs from a $70,000 truck without deleting stuff like windows, batteries, axles and other parts. Rivian makes fine vehicles, but they are too expensive to sell at a profit. Even worse, despite the good quality of their vehicles, it is very clear that demand has weakened significantly. And now they have worked through orders from enthusiastic "first adopters" and have to convince regular truck buyers to buy them. I am not an engineer no do I have an automotive background, but how can a company find a way to cut the coast of a vehicle by 50% without sacrificing many of its best features? I don't see a rosy path ahead for Rivian.
The only reason to listen to listen to analysts is to snap up bargins when they cause stock prices to fall for stupid reasons (or to allow them to buy stocks at low prices)
We don't pay much attention to analyst forecasts because we know how they get produced. They sometimes add value with good questions on earnings calls but that's the exception, not the rule.
I've been a fan of Rivian's vehicles and have really looked forward to the release of the smaller, cheaper R2 series next month. So much so that I signed up for updates on the R2. Or tried to. This very high-tech company, with an army of coders building software for their very software-dependent vehicles, could not create a website that allowed an interested, potential buyer to receive updates on their newest, likely most important, product. For weeks, every attempt has generated this message: Failed to submit form. Please try again later. This strikes me as a rather poor introduction to the brand, and, perhaps, indicative of larger problems worth considering before purchase.
Agree. (Starts rant.) Back in the day, a broken form would be an absolute embarrassment. So would shoddy customer service. Top engineers wouldn't want to work at a firm that didn't pay attention to details like that. These days, it's as if someone is doing you a favor if they provide good customer service, or offer up a website that works. I'm going to say this because I think it has applicability in most cases. And we all know it. When companies stop hiring based on merit and instead hire based on other attributes, this is the sort of shite you can expect. It's incompetent laziness that any moderately capable person wouldn't tolerate. You make an excellent point. Regardless of the reason for that broken form, the company not rectifying that says a lot about where their priorities are at. (Ends rant.) Joe P.
It all BS. The short has attacked since the earnings call. I own 10 of the R1T'S. I have purchased and run the following trucks kenworth, Mack, International, Freightliner, Ford, Chevy, Isuzu, Mercedes. I have owned the following high performace vehicles Ferrari, Porsche, Corvette. None of these come close to the technology, fit and finish of the R1T. Full disclosure the Ferrari is close. LONG LIVE RIVIAN!
We're just going to leave this as an example of what cheerleaders usually post. You cannot just say "BS" in the face of facts and expect people to take you seriously. Trying to act like a BSD by throwing around names of expensive cares you've owned doesn't help your credibility either. And your last little quip is really the icing on the cheerleader cake.
@@bobbysunshine3458 Honesty is all you will get around here. No. Absolutely not. You are not a regular, else you would know we NEVER are dumb enough to short any stock. We are investors, not speculators.
@@baphomathedude8057 Hahahaha. Do you always make statements that are devoid of facts? We have over 200,000 miles on 10 trucks with zero service issues. It is all about numbers to us. Starting May of 2022 we started replacing 10 internal combustion pick up trucks with 10 electric Rivian’s. An internal combustion pickup has approximately 122 moving parts. An electric pickup trucks has approximately 12 moving parts. Moving parts are what break with the most frequency. So we just went from 1,222 moving parts down to 122 moving parts. It is just simple math. In all fairness to you maybe I am missing something? Maybe your statement isn’t devoid of facts? Can you tell me what you know is wrong with this product?
The only reason I bought the stock is that a physician at my hospital has owned one for about a year and still loves it. Sadly, the product might be good, but the stock is crap.
Don't ape into stocks that your mates invest in. Very important to invest based on your own convictions. We've all been there. No worries. Learn and move on.
In 4Q23, Rivian's gaap loss was $107.4k/vehicle. Rivian's situaion is beyond dire. in 4Q23, Rivian delivered 13,972 vehicles and reported a gaap loss of $1.5 bill. Rivian lost $107.4k per vehicle. Rivian needs to sell its cars for around $200k+ just to break even on a gaap basis. Almost impossible. And why Rivian is headed for certain bankruptcy
I always laugh when people say EVs don't work in the cold. Norway has the highest EV adoption rate in the world, and last I checked it was kinda cold there lol
@@springhillfitness6837 True enough but don't they have problems in winter as a general rule? Genuinely interested to understand the problem better. Does it affect all vehicles? According to U.S. media it's only Teslas ;)
@@joepivEVs do lose some range in the cold, especially if you have the heat cranked up, but it's typically not noticeable because people average around 40 miles a day of driving and newer EVs have 250+ miles of range. They also charge a little slower in the cold if you don't let the battery warm up first. The effects are small enough that I personally haven't noticed a difference and the people of Norway do just fine with their EVs. For some reason the news and social media like to blow out of proportion the cold weather issues, just like they do anytime there's a freak accident and a battery catches fire or a Tesla crashes on autopilot. Every day hundreds of gas cars crash, sometimes they catch fire (gas is highly flammable), and occasionally they won't start in the cold, but not a peep from the media when it's a gas car :)
It's really quite impressive they were able to go from zero to selling billions of dollars worth of vehicles. However, we strictly adhere to two rules when it comes to story stocks. Never invest before revenues, and never invest until there are positive gross margins that are showing some consistency over time.
This company will never survive without being acquired. They are burning way too much cash November and their vehicles are too damn expensive. Not to mention there are still quality issues with all electric vehicles. Not to mention charging issues around. Dead money for the next few years or worse. That is my humble opinion.
I agree with you but the future is bright. We’re halfway there to solving the charging issues and infrastructure and NACS port centralization and other companies making networks. Lots left to do.
Now now... we've all been there before. If the market has taught us anything, it's that we should always wait until the big beautiful woman who suffers from a myriad of weight-related health issues belts forth a tune.
Most likely you are a Tesla or BYD investor. I agree that facts are facts and they are going through tough times currently just like Tesla did and BYD (which was heavily subsidized by the Chinese government), but you fail to acknowledge the other fact that they make top notch widely likable products that keep winning first place in almost all car magazines.
Most likely we aren't. We have no dog in the race. We only analyze the facts. In the video we point out a major difference between Rivian and Tesla that shouldn't be brushed aside. Top notch widely likeable products aren't going to keep this company from bankruptcy. That's a fact we need to face just as Tesla faced.
Rivian just needs to raise prices. If someone is willing to pay 80-100k for an electric truck, which they dont even use as a truck, it's a luxury status symbol, and incidentally a truck. Someone willing to pay that much for an EV to tell everyone they're rich would pay even more. They may even feel more satisified if it's more expensive. Focus efficiency on the Amazon fleet, not the consumer products.
Here is the problem, the Rivian truck is absolutely disgusting, the front end looks like a Pokemon cartoon like character. It looks cool for an Amazon delivery truck BUT definitely not for a 80k plus vehicle. Rivian counted their chickens way too early by purchasing land and manufacturing plants, the debt is too high, the monthly overhead is waaaaay too high and the competition for trucks in that price range is really tough. Rivian and Lucid are delusional companies, Fisker is the only one that has a shot to become the number 2, in my opinion.
I dont see any western EV startups being able to make it now that Tesla is fully established. Tesla being first gave them wiggle room in a market with demand and no competition plus many very wealthy investors pumped huge amounts of cash into their business while interest rates have been historically low. It will take government help to get going now. If your China or a fully established OEM with political leverage "GM" your good. If not, your toast.
trash stock, I dont support any companies that make 80k+ cars. Same thing goes for Lucid. Do you think majority of Americans can afford something like this? If not, then why buy the stock? If i wanted to buy a premium EV, I would buy the upcoming Macan which will have close to 400mi of range and is an actual reputable brand.
I’m sure the average guy has a spare $70,000 to buy a Rivian vehicle. This company is burning cash and will go bankrupt. Also, their vehicles are ugly designs.
One man's trash is another man's treasure. 70K is steep, and we've always though that people who buy trucks want a proper petrol-powered truck. We shall see.
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Very interesting video. I am a senior automotive development engineer who was highly courted to join the Rivian development team when they were located in Michigan. Though the opportunity was tempting, I did not believe in the viability of such an expensive truck that had all the limitations of EVs. I do not believe that they will become more mainstream until there is a viable charging infrastructure available and the costs come down to the ordinary buyer. Until then, EVs will be a very limited market. You now have all the realities of real world experience coming to fruition, particularly in cold weather markets. I'm glad I stayed with my current employer.
Really glad you enjoyed the video and thank you for sharing your experience. Any thoughts on BYD and their low-cost EVs? We covered that in a video you might like titled "Chinese EVs Dominate": th-cam.com/video/D0jJG0Sego4/w-d-xo.html
@Nanalyze I have not seen that video, but I will check it out. The cost advantage of the Chinese is certainly a big plus for them. However, there is still the infrastructure issue and the everyday limitations of EVs that many people don't want to accept at this time. If it is cheap but does not meet your needs or expectations, that is a hard sell for many people. I also think the Chinese could very well be dealing with future tariff issues, especially if Trump gets into office. They may build a plant in Mexico, but I think it will be tough sledding for them to make a dent in the US market. Build quality and unknown reliability would be on the minds of future customers, too. I still think the lack of a national infrastructure is the biggest hurdle for EVs. To get that would require the federal and state governments to work together with utilities. We all know how that would go. Add in the time to get that done and you're talking years and billions of dollars. EV manufacturers could not hang on that long nor would customers be that patient to wait that long. I am all for customer choice, and if there truly is a viable market for EVs, good companies will sniff it out and provide that product. However, it must be at a reasonable price and be no worse to maintain and operate than an ICE vehicle without government subsidies. I have not even addressed insurance costs or the impact that these heavier vehicles have on our roads. We'll see what happens. Keep up the good work!
@@charlespapineau5428 Good info from someone who has knowledge working in the vehicle space. Just a question and a factual point. Many EVs in North America are moving to the North American Standard in 2024, which is Tesla's supercharger technology. Does this change your thesis about a weak charging infrastructure since 93% of people will charge at home (I understand that many people live in apartments or in cities without home charging capability)? My factual point: Kia EV6 ,Tesla Model 3 and many EVs weigh the same or less than Ford F150, yet we never hear about impact on roads from pickup trucks. A quick google search on weight of each vehicle is easy to find. I appreciate your thoughts.
@charlespapineau5428 Thank you for taking the time to share some very good insights with everyone - and for the kind words of encouragement! Joe P.
Hey Joe, kinda a mirror version of this Rivian piece, I got an interesting video idea to think about.
RIVN is a low quality company, and naturally the price goes down and there are plenty of people holding the bag. 💰
But given there's a lotta good companies out there, I was wondering if you'd consider something about the psychology of averaging *up.* 🤔
Buying the dip and averaging down is pretty well-known, but I've never heard anyone discussing averaging *up* in a quality company, which I think people may be even more hesitant to do.
Especially given interest rate cuts may happen this year and drive all our stocks up.
And inevitably, we invest in our stocks because we WANT them to go up, but ironically and naturally don't want to increase our cost basis. 🤷♀️
Good thoughts here. So we manage two strategies - disruptive growth and dividend growth. For dividend growth, we think dollar-cost-averaging over very long periods of time with dividends reinvested works quite well. Managing established portfolios can employ a set-and-forget strategy or trim runners and reinvest in depressed positions. For tech investing, we use simple valuation ratio instead of price. So while a price may have increased a lot, it may actually be "cheaper" than before. However, we cap the amount we invest into them to avoid putting too much into any single stock. You make a very good point about how nobody wants to increase their costs basis. It's very uncomfortable psychologically. Not sure there's an entire video we could do on that but it's on my radar now. Joe P.
You didn't mention that Amazon has a 16% share in the company worth over 3 Billion. I would imagine that they might step in or help raise funds if they were going to become bankrupt. Great video by the way, some excellent points to consider.
The also didn’t mention anything about the EDV sector…
We covered Amazon in our last Rivian video titled "Rivian's Amazon Problem"
th-cam.com/video/7TSq7dJdeU8/w-d-xo.html
Amazon are quite willing to walk away from billion dollar investments if they are not working
@@brianwest7344 Amazon dabbles in lots of companies with their "give us warrants and we'll buy your products" approach.
@@brianwest7344 Yes but usually when they don't work it's because people just don't like the product. If they have a best seller but it's losing money, historically they subsidize it until they can find a way to make it profitable.
Great analysis, thank you
We really appreciate the feedback!
Very insightful, thank you !
You are most welcome. Feedback is very much appreciated.
There's a saying: Every day you own a stock is like you are buying it again. It can be a little more complicated if you are up on a position with short or long-term capital gains considerations but for anybody that is in the red on a position, it's important not to get trapped by the sunk cost fallacy and to be able to make the decision with as little emotion as possible about whether to sell and put the money somewhere potentially better or not.
Good comment here. It's also important to employ some risk management before entering a position so you have conviction. Tech stocks are very volatile. If you truly believe in Rivian's potential, then the depressed share prices are a godsend. We just never thought it was a good idea to invest in the company at any price or time, and they appear to be on shaky ground now. They might pull out of this, but it seems more likely they'll need to raise money and not have many good options.
Very good logical analysis of Rivian. Subbed.
Love to hear the feedback, thank you!
I hope they make it. I love my R1T, and RJ has a good head on his shoulders. I think they will show positive gross margins by end of '24 and then raise capital to fund the R2 build. The R2S will be the perfect alternative to the model Y for those who prefer an outdoorsy SUV to a sporty SUV. If priced in line with the Y, I could see them selling 500k annually. Time will tell!
Hopefully they pull through. Glad to hear you're enjoying their product! The trucks do look pretty cool - lots of them in the Pacific Northwest. Joe P.
They have outstanding vehicles that consumers want. I see more of them out there these days. And R2/R3 are exciting. The stock could have big upsides as they ride out the year. Hopefully interest rates come down a bit and demand picks up. It's going to come to execution and a bit of luck from the economy front.
The vehicles aren't the problem, it's the company that can't produce them at a profit. Hope and $6 might get you 6-inch cold cut combo at Subway these days. We're looking at how the company looks today and it's not good.
Good analysis, sir. I don’t think you’ll have to wait until fourth quarter earnings or positive gross profit to tell how this will go. Retooling a plant this late in the game is no easy task. The 2nd quarter call will give you some idea on how well Rivian recuperated from the production pause. I won’t go too deep but people are overlooking this. Regardless of the changes to reduce materials costs, if you can’t hit the ground running faster than Usain Bolt they are already doomed. They know this as well. Final note, is something someone already mentioned, the EV woes in general also should not be overlooked for the short term. I don’t need to get into a political debate over the merits of reduced emissions but it will eventually have to happen. However, currently the math ain’t mathing, I would like to hear your thoughts in a video on what your take is on Toyota’s slow build into the EV world. Coming from manufacturing background I have a hard time arguing with the premier car company (and the manufacturing gold standard) on the planet . When Akio Toyoda says it’s overhyped it’s hard to not hear his argument and agree.
Thank you! Very good points you raises here. China's EV push into emerging markets (places where TCO really matters to people) is what we're watching closely. They've managed to drop prices enough to make it truly cheaper to operate electric than gas-powered (it seems). We covered that recently in this piece: th-cam.com/video/D0jJG0Sego4/w-d-xo.html
@@Nanalyze appreciate the feedback, will definitely watch the video and dig into this. Thanks again.
There are so many easier ways to make money in this market. Why would anybody even mess around with a stock like this? It makes absolutely no sense.
Let's be honest here. There are no easy ways to make money in the market otherwise everyone would be a proper BSD.
They are hoping Rivian becomes the next Tesla. At this point, investors are just hoping Rivian survives.
@@method341 Well said
It’s interesting that the CEO or analyst list interest rates. The target customers have $80k+ to spend on an electric vehicle are not financing it.
Didn't notice that
Another question: will their best engineers wait until cash is at zero or will they move along before they are forced to.
That's an excellent question. You know management is giving them the regular rah-rah speeches, so they probably see success is still feasible. It certainly can be, they just need to show some real progress in 2024. How "modest" those positive gross margins will be will say a lot.
Great video, hit on the main points and I like the way you analyse. Subbed! 💪
We appreciate you taking the time to share feedback! And the sub of course ;)
what was the investorsplace article used for the video?
Can you please let us know the point in time during the video you are referring to? Thank you!
Great video. Great research. Thank you
You're most welcome
Yep definitely won’t be looking at this stock until they turn this thing around (if they ever do)
2024 is going to be make or break
Rivian is coming along when there’s plenty competition not just from other EVs. Tesla had to lower its prices in this environment. Rivian got massive headwinds
Agree. It's not a good time to be an up-and-coming EV company.
@@Nanalyze It will be like this for awhile. They all face lack of infrastructure. I don’t need an app to find a gas station.
@@merovingian688 Good point. That's also reflected in the entire EV charging thesis.
Thanks...Definitely confirmed my suspicions.... now trading under 11$... Market Cap is about its cash on hand. I was hoping you would revisit ABCL, PL & RNLX in future posts... THx
You're most welcome Frank. We'll look to do an AI Drug Disco update at some point (both ABCL and RXRX) and a PL article or video will be out soon once their year-end results come out. RNLX is just to small to even mess with anymore.
@@Nanalyze Thanks!
Just bought some, mostly as speculation. Price seems low. They will present new product soon and margins might improve over the year. Which might push the stock back up even short term. Especially if market in general does well. For the same reason (no reason) it was once valued at 120 it might be valued at 50 again.
Long term I also don't see it dead.
We're investors, not speculators ;) Always try to use valuation ratios when setting price targets otherwise they are just arbitrary numbers. 2024 will be a pivotal year. Let's hope they turn the gross margin ship around as that's a key next milestone.
I come for the sound, logical advice, but i stay for the non-stop Office Space references and clips.
There are people in this world who have not seen Office Space. We're doing our part to change that.
Great analysis but ZERO mention on the EDV part of the business? Why did you leave that very important part out…even when you mentioned their production shortfall in Q4 you skipped the Amazon factor…why? So because of that I question your post…
In the video we talk about our last piece on Rivian - "Rivian's Amazon Problem" You can watch it here: th-cam.com/video/7TSq7dJdeU8/w-d-xo.html
Rivian also predicted to meet production and they didn’t so what makes you they that their prediction for grow this year will be met?
Good point
R2 would be very important for rivian to survive and price point with 40k start you would have a winner if the range is close to 250 . And I would be see 1 million registrations in 1 quarter and I expect Detroit, European or Apple to make a play for it late this year or next year . Price point is very crucial if you do volume and all your problems will go away . If R2 impress the everyone we are gone see few large buys into stock and to Tesla to succeed you need a strong number 2 . If not it’s not gone end up well for both .
Lots of speculation there ;)
I have a good amount of shares should I pull out? I’m quite worried and am down a bit of money now :(
We've all been in a similar situation and looked for guidance. However, you need to make those decisions yourself. That's one of the biggest steps towards becoming a better investor. Making decisions with conviction and not looking back.
I hope and pray they do recover as of now I’ll stick but please post if at anytime it’s just gone too far and I can save some money. Thank you
But thank you for this video hearing this was pretty bad news
What we've talked about today is really nothing novel. This company is trying to do something extremely difficult. Odds are against them based on a simple analysis of the numbers as we've done today. Deciding to invest or continuing to hold is a question of risk tolerance. We're very risk-averse and this isn't something we'd ever get involved in to begin with because of those gross margins. It's always important we learn as we go along.
@@Nanalyze then you probably wouldn’t have ever invested in TSLA or AMZN early either right?
still mind blown on how some of these companies get such astronomical pre-launch evaluations
Right? The fact some had no revenues and still achieved such valuations is incredible. Compared to other EV companies Rivian actually executed pretty well. It's just that crossing the "production chasm" is a lot harder than it looks.
I invested in Rivian over a year ago in hopes that they would get their production issues sorted out and focus on scaling, but after recent interviews with RJ Scaringe he seems to have no solid plan to reduce Rivian's cost per vehicle and the CFO also is just as dumb founded, I've never seen management so brazen before. I will consider reinvesting in them maybe a few years down the line because I do believe Rivian (despite manufacturing and scale issues) produces excellent vehicles that are innovative in design and performance, but right now I bit the loss and dumped all my shares a few weeks ago
The production chasm of hell is tough to cross
Rivian is going through tough times partly due to quantitative tightening. Tesla had tough times but it was during quantitative easing.
The "What About Tesla" fallacy was talked about twice in this video.
@@Nanalyze Fallacy? The CEO is worth $205 billion and getting a $56 billion pay package
@@merovingian688 We weren't discussing pay for the CEO of either company.
@@Nanalyze It’s a major factor. Especially when it’s driving relocation and involvement of politicians.
@@merovingian688 Awesome. If we decide to cover that in a video, then we'll be happy to discuss it in the comments section.
Strange why you didn’t mention that Amazon could come in an take a bigger part of the company given they are already a significant partner.
The video specifically mentioned the last video we published on the Amazon Rivian relationship (th-cam.com/video/7TSq7dJdeU8/w-d-xo.html). Strange that you didn't see that. ;)
Thanks for a clear, insightful video. Alas, I have a very hard time seeing how Rivian can slice $30,000 to $40,000 in costs from a $70,000 truck without deleting stuff like windows, batteries, axles and other parts. Rivian makes fine vehicles, but they are too expensive to sell at a profit. Even worse, despite the good quality of their vehicles, it is very clear that demand has weakened significantly. And now they have worked through orders from enthusiastic "first adopters" and have to convince regular truck buyers to buy them. I am not an engineer no do I have an automotive background, but how can a company find a way to cut the coast of a vehicle by 50% without sacrificing many of its best features? I don't see a rosy path ahead for Rivian.
Your summary is very well put. That's how we see it as well.
this take is a little too bearish, Rivian's numbers are headed in the right direction
What concerns raised in the video do you feel shouldn't be concerning?
They are spending billions on the production line of a much cheaper R2
Yes, let's hope that makes a positive gross margin a reality.
The only reason to listen to listen to analysts is to snap up bargins when they cause stock prices to fall for stupid reasons (or to allow them to buy stocks at low prices)
We don't pay much attention to analyst forecasts because we know how they get produced. They sometimes add value with good questions on earnings calls but that's the exception, not the rule.
I've been a fan of Rivian's vehicles and have really looked forward to the release of the smaller, cheaper R2 series next month. So much so that I signed up for updates on the R2. Or tried to.
This very high-tech company, with an army of coders building software for their very software-dependent vehicles, could not create a website that allowed an interested, potential buyer to receive updates on their newest, likely most important, product. For weeks, every attempt has generated this message:
Failed to submit form. Please try again later.
This strikes me as a rather poor introduction to the brand, and, perhaps, indicative of larger problems worth considering before purchase.
Agree. (Starts rant.) Back in the day, a broken form would be an absolute embarrassment. So would shoddy customer service. Top engineers wouldn't want to work at a firm that didn't pay attention to details like that. These days, it's as if someone is doing you a favor if they provide good customer service, or offer up a website that works.
I'm going to say this because I think it has applicability in most cases. And we all know it. When companies stop hiring based on merit and instead hire based on other attributes, this is the sort of shite you can expect. It's incompetent laziness that any moderately capable person wouldn't tolerate. You make an excellent point. Regardless of the reason for that broken form, the company not rectifying that says a lot about where their priorities are at. (Ends rant.) Joe P.
It all BS. The short has attacked since the earnings call. I own 10 of the R1T'S. I have purchased and run the following trucks kenworth, Mack, International, Freightliner, Ford, Chevy, Isuzu, Mercedes. I have owned the following high performace vehicles Ferrari, Porsche, Corvette. None of these come close to the technology, fit and finish of the R1T. Full disclosure the Ferrari is close. LONG LIVE RIVIAN!
We're just going to leave this as an example of what cheerleaders usually post. You cannot just say "BS" in the face of facts and expect people to take you seriously. Trying to act like a BSD by throwing around names of expensive cares you've owned doesn't help your credibility either. And your last little quip is really the icing on the cheerleader cake.
@@Nanalyze Do you have a short position on Rivian? Simple question. Be honest.
@@bobbysunshine3458 Honesty is all you will get around here. No. Absolutely not. You are not a regular, else you would know we NEVER are dumb enough to short any stock. We are investors, not speculators.
I am so sorry you have the burden of not 1 but 10 of these terrible trucks. Hoping you get better soon.
@@baphomathedude8057 Hahahaha. Do you always make statements that are devoid of facts? We have over 200,000 miles on 10 trucks with zero service issues. It is all about numbers to us. Starting May of 2022 we started replacing 10 internal combustion pick up trucks with 10 electric Rivian’s. An internal combustion pickup has approximately 122 moving parts. An electric pickup trucks has approximately 12 moving parts. Moving parts are what break with the most frequency. So we just went from 1,222 moving parts down to 122 moving parts. It is just simple math. In all fairness to you maybe I am missing something? Maybe your statement isn’t devoid of facts? Can you tell me what you know is wrong with this product?
Right now Tesla is not a good investment either, unfortunately.
Different convo. We last covered Tesla here: th-cam.com/video/UNmxIOrhWUI/w-d-xo.html
Just bc price is down doesn't imply it's a bad investment.
You buy low sell high. Don't just buy when there's sunshine and rainbows
The only reason I bought the stock is that a physician at my hospital has owned one for about a year and still loves it. Sadly, the product might be good, but the stock is crap.
Don't ape into stocks that your mates invest in. Very important to invest based on your own convictions. We've all been there. No worries. Learn and move on.
In 4Q23, Rivian's gaap loss was $107.4k/vehicle. Rivian's situaion is beyond dire. in 4Q23, Rivian delivered 13,972 vehicles and reported a gaap loss of $1.5 bill. Rivian lost $107.4k per vehicle. Rivian needs to sell its cars for around $200k+ just to break even on a gaap basis. Almost impossible. And why Rivian is headed for certain bankruptcy
It's difficult to see how they might get to a "modest" positive gross margin this year. If they can do that, then there may be hope.
12% stock decline for vehicles that don’t work in cold weather😂😂😂😂😂😂
Companies, not stocks. Computer says please try again.
I always laugh when people say EVs don't work in the cold. Norway has the highest EV adoption rate in the world, and last I checked it was kinda cold there lol
@@springhillfitness6837 True enough but don't they have problems in winter as a general rule? Genuinely interested to understand the problem better. Does it affect all vehicles? According to U.S. media it's only Teslas ;)
@@joepivEVs do lose some range in the cold, especially if you have the heat cranked up, but it's typically not noticeable because people average around 40 miles a day of driving and newer EVs have 250+ miles of range. They also charge a little slower in the cold if you don't let the battery warm up first. The effects are small enough that I personally haven't noticed a difference and the people of Norway do just fine with their EVs.
For some reason the news and social media like to blow out of proportion the cold weather issues, just like they do anytime there's a freak accident and a battery catches fire or a Tesla crashes on autopilot. Every day hundreds of gas cars crash, sometimes they catch fire (gas is highly flammable), and occasionally they won't start in the cold, but not a peep from the media when it's a gas car :)
@@springhillfitness6837 Very useful information, thank you!
i jumped in right before ford dumped them. all i can do is cry.
Funny how all that bad stuff came out right after IPO
It's really quite impressive they were able to go from zero to selling billions of dollars worth of vehicles. However, we strictly adhere to two rules when it comes to story stocks. Never invest before revenues, and never invest until there are positive gross margins that are showing some consistency over time.
This company will never survive without being acquired. They are burning way too much cash November and their vehicles are too damn expensive. Not to mention there are still quality issues with all electric vehicles. Not to mention charging issues around. Dead money for the next few years or worse. That is my humble opinion.
Your humble opinion makes sense
I agree with you but the future is bright. We’re halfway there to solving the charging issues and infrastructure and NACS port centralization and other companies making networks. Lots left to do.
@@justinstewart3248 Not for Rivian.
@@justinstewart3248 Any thoughts on the concerns raised in this video?
Lol humble?
No one can predict future, yet he thinks he can
No China Market for me
Understandable
Yes. Yes they should be. And they need to remember to wear a helmet when they go outside.
Now now... we've all been there before. If the market has taught us anything, it's that we should always wait until the big beautiful woman who suffers from a myriad of weight-related health issues belts forth a tune.
Most likely you are a Tesla or BYD investor. I agree that facts are facts and they are going through tough times currently just like Tesla did and BYD (which was heavily subsidized by the Chinese government), but you fail to acknowledge the other fact that they make top notch widely likable products that keep winning first place in almost all car magazines.
Most likely we aren't. We have no dog in the race. We only analyze the facts. In the video we point out a major difference between Rivian and Tesla that shouldn't be brushed aside. Top notch widely likeable products aren't going to keep this company from bankruptcy. That's a fact we need to face just as Tesla faced.
Its better than buy nio
The first of our two-part piece on NIO here: th-cam.com/video/ti43kFR1s44/w-d-xo.html
I think Ford or GM will wait until 2025 and buy the remainder of the business. there is no long term future.
2024 is make or break
Rivian just needs to raise prices. If someone is willing to pay 80-100k for an electric truck, which they dont even use as a truck, it's a luxury status symbol, and incidentally a truck. Someone willing to pay that much for an EV to tell everyone they're rich would pay even more. They may even feel more satisified if it's more expensive. Focus efficiency on the Amazon fleet, not the consumer products.
Ah, the Veblin good theory. It might work. Thank you for sharing your thoughts!
@@Nanalyze**cough cough** bitcoin😊
No, prices are already at the upper limit of what people are willing to pay. There's simply aren't many buyers in the $90k+ price range.
@@AceOnBase1 Good point.
Here is the problem, the Rivian truck is absolutely disgusting, the front end looks like a Pokemon cartoon like character. It looks cool for an Amazon delivery truck BUT definitely not for a 80k plus vehicle. Rivian counted their chickens way too early by purchasing land and manufacturing plants, the debt is too high, the monthly overhead is waaaaay too high and the competition for trucks in that price range is really tough. Rivian and Lucid are delusional companies, Fisker is the only one that has a shot to become the number 2, in my opinion.
You're clearly from Asia. All your charts run from right to left. Where did you grow up?
Hadn't thought about that! I was educated in the U.S., the U.K., and Hong Kong. Must be the Asian persuasion. ;) Joe P.
1:35 'bee school'? Really? smh
It's where people slap down a six figure sum in exchange for lots of theoretical stuff that doesn't work too well in the real world.
I dont see any western EV startups being able to make it now that Tesla is fully established. Tesla being first gave them wiggle room in a market with demand and no competition plus many very wealthy investors pumped huge amounts of cash into their business while interest rates have been historically low. It will take government help to get going now. If your China or a fully established OEM with political leverage "GM" your good. If not, your toast.
Seems like an accurate portrayal of the situation. Thank you for sharing your thoughts!
Ha ha EV haters Tesla is the future get use to it!
10,000 less parts of course it’s more reliable!
Guess we all need to get use to it then...
trash stock, I dont support any companies that make 80k+ cars. Same thing goes for Lucid. Do you think majority of Americans can afford something like this? If not, then why buy the stock? If i wanted to buy a premium EV, I would buy the upcoming Macan which will have close to 400mi of range and is an actual reputable brand.
Macan looks pretty cool
I’m sure the average guy has a spare $70,000 to buy a Rivian vehicle. This company is burning cash and will go bankrupt. Also, their vehicles are ugly designs.
One man's trash is another man's treasure. 70K is steep, and we've always though that people who buy trucks want a proper petrol-powered truck. We shall see.