Why The R2 Won't Save Rivian
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- เผยแพร่เมื่อ 13 มิ.ย. 2024
- The electric vehicle maker Rivian recently unveiled its mass market R2 vehicle which they plan to launch in 2026 at a starting price of $45,000. We are skeptical that they will be able to make this car profitably.
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0:00 - 1:29 Intro
1:30 - 6:05 Collapse in demand
6:06 - 11:10 Path to profitability
11:11 R2 - ภาพยนตร์และแอนิเมชัน
I was going to comment but I’m concerned about geopolitical uncertainty.
Same- he might as well have said "because the moon told us too"
This is great!
Tesla was heavily subsidized by government. They took advantage of democrats who believe in green deal. But truth is that EVs are neither affordable nor environmentally friendly.
Good thing nobody gives a duck about what you think....
Never again!
Bad news: we are losing money on every car we sell.
Good news: we are selling fewer cars
Profit!
fewer...
As a public company they really don't have a choice but to paint a positive picture!😅
Really bad news: The car buyer will have enough money left over to buy a Model 3 for the wife!
It is a weird variation of "we are losing money on each unit but making it up on volume".
It’s girl math….
Potential customers should be worried about getting parts if Rivian goes out of business.
They will be bought out if that happens
Tesla stopped taking Rivian as tradeins.
@@External2737 Fake news, that's fisker
It's not the parts that will be the problem, it will be servicing them.
@@methos-ey9nf At the right price, local mechanics will service them. However, it will not be cheap and with so few Rivians built, parts will be a huge problem.
They're about to get sucked into the downward spiral of cost-cutting.
How do you cost cut to cut 30 grand to make a car profitable ???
The CEO didn't answer one question. Typical ceo.
Exactly...lol
That's what happens when you know that your company is smurfed. 😂
He went to the Mary emBARRAsing school of marketing.
Snake ceo
If he answered honestly the company would be forced to close up shop overnight as people sell off
Rivian is yet another startup that used effectively free money to hyper scale, which only works as long as the free money tap never turns off. It has and now all these CEOs are finding out that they actually need viable business plans again.
imagine what governments would do if everyone chose not to pay them money
@@garygarside9782 what does it have to do with rivian
Japan and Germany (other countries as well) subsidize their important companies. We have too for our auto makers in the past. That option should at least be considered. Hopefully Amazon can step in with help until their manufacturing matures and becomes more efficient. That level of risk taking is uncommon today and that's short sighted. Tesla relied on subsidies in the beginning as well. And now we have a world renown brand that generates great manufacturing jobs.
Tesla was heavily subsidized by government. They took advantage of democrats who believe in green deal. But truth is that EVs are neither affordable nor environmentally friendly.
Tesla is same. They will soon find out that they can’t sell EVs. What then?
When the author roasted Rivian on the quality of graph they used lol. I was rolling😂😂
It was probably the Rivian designer who made the slides. I hear he really likes things to be square!
5:40 battery "artificially limited by software". That kind of dealings is why farmers are forced to hack their tractors
Right to Repair and ownership over software are going to be the next big fights for our generation.
@@midnightfenrir unfortunately it wont because most people are stupid and dont know anything about this
i feel like buying limited packs works because shouldnt you be able to charge to 100% if its really XXX% in total?
@@trod5902 When it comes to software, especially necessary business software, movies, music, and other subscriptions, the general public have been conditioned to accept it, it's when they start to require a subscriptions for things like heated seats that people know they paid for and never had to do more than flip a switch is when you will see a demand for change.
Tesla has done it too.
Showing the R2 and R3 concepts will also create an Osborne effect on R1S. People who had ordered one or were on the fence due to its high price will certainly opt to wait for the smaller and cheaper versions. They needed to at least get their COGS on the R1 line closer to breakeven before showing the new models. Seems like the desperation will start kicking in here soon.
By your logic, Tesla should never have introduced the Model 3 and Y, because they took away from Model S and X sales.
@@TroySavarytwo different financial climates. It could be argued that it worked for Tesla because of the extremely low interest rates.
@@TroySavaryTesla had been selling the Model S for 6 years when they announced the Model 3. They had brought their costs down to make a profit on each sale, and had recouped most of the plant investments made on the model S. Rivian has only been delivering R1 for about a year. Somehow they are losing more money per vehicle now than a year ago.
Announcing the R2 was the desperation kicking in. They are desperate to attract more capital.
@@atomicsmith So announcing a vehicle that will ship in two years is desperation? What did that make the Cybertruck announcement?
The average consumer may not understand the high tech at all, but even the dimmest consumer can understand range and B.S. overstatements of range ...
Our Rivian gets its stated EPA range. What many people miss is that the EPA rating is a mix of highway and roadways. If you drive only on roadways your range will be higher than EPA. If you drive purely highway it'll be lower than EPA range. Our R1S beats the EPA range in conserve mode on highways, which is something our Tesla never did
you seem to be commenting on the wrong video - Tesla is the one that has this problem, not Rivian.
...come to Wisconsin in a riven. See how that epa stands....
@@midnull6009 lol nothing will get EPA there in the winter, gas or electric (I'm from Northern BC, similar cold, -40C)
Until you go scale, you need to be premium.. Remember the niche craze for Tesla Roadster back in the day. It was more expensive than Rivian currently is, even without 15 years of inflation. You need scale and fleet to succeed in the car game, Rivian lacks both..
But by the time Tesla was producing the Model S and Model x, they had excellent gross margins, and it was obvious that if they could scale up successfully they would end up a highly profitable company. Rivian has never really had a path to profitability, losing far more money than Tesla ever did despite not sinking billions into a charging network, attempts at full self driving, or the costly failures during the Model 3 ramp up. Rivian is failing because they never made a serious effort to keep costs under control.
And it isn't just Rivian failing at making EV's profitably, Lucid is also losing insane amounts of money, and Ford recently admitted that they lost ~4.5 billion on their EV efforts in 2023 instead of the ~3 billion they expected, with years more of multibillion dollar losses to come. I haven't seen any numbers for GM, but considering the issues they have been having with ramping up their Ultium battery technology I can't imagine that they are anywhere close to profitability either.
Tesla was heavily subsidized by government. They took advantage of democrats who believe in green deal. But truth is that EVs are neither affordable nor environmentally friendly.
@faroncobb6040 Wr9ng. Tesla didn't have a per unit profit.....they only made profit from selling carbon credits to other companies.
@@faroncobb6040 Isn't that typical of the US auto industry though? It seems like everything they do they fumble in one way or another, then go through bankruptcy and become mildly profitable again only to fall apart again.
@@methos-ey9nf You're thinking of Chrysler, they've been through that cycle a few times.
Price needs to come down on these vehicles 85K-100K+ vehicles are not the norm.
I own a tree farm and our Super Dutys were $85k ten years ago. An equivalent 2024 model is ~$110k, which is consistent with inflation. It's the rest of the auto market that has MSRPs rising significantly faster than inflation. Mid-level trim midsize CUVs can easily cost $65k now, which is crazy.
No the price is fine. That is the norm for that kind of car. The problem is charging that much and not making a profit.
Phillip.
@@Noah_EThose prices like a lot of things are "industry standard" but also not sustainable.
You own a working farm and bought king ranches or platinum’s? That’s just dumb.
@@tommyhairyeah7726 You didn't link me, but I am assuming that was referring to me. It's a tax write-off so I buy what I want and what employees won't mind spending all day in if need be. We had an XL once. Manual mirrors, aftermarket cruise, vinyl seats that sucked when it too hot or cold, sealed beam headlights that were too dim, four crank windows, etc. We dumped it after two years and it was worth almost nothing as a trade-in. We would have been better off buying a Platinum that would have retained more value. Also, the property is well maintained so we are not beating them up. You can navigate almost all of it in a Subaru with decent All Terrains, but a Subaru can't haul 6-10 tons or idle day on less than a quarter tank of diesel.
The R3 is the one that I really want.
I'm waiting on the R4 - basically they just send you a picture of the car
same
I wouldn't be surprised if that car never comes out, the R2 is a 2026 car and the R3 will be beyond that, who knows if rivian will even last that long
The one you really want is the R2D2
Lmao
Was totally expecting him to sound like Steve-O
Same here
Yeah me too 😂
Did you know that Rivian was originally founded in 2009 as a sports car company? They planned to make a two-seater electric coupe called the A1C, but they scrapped the idea after realizing that the market was too small. They then pivoted to making electric adventure vehicles, which is what they are known for today. I think this shows that Rivian is willing to adapt and change, but also that they have a history of making risky bets. I wonder what their next move will be.
Anyway, great video as always.
This feels written by a bot.
This 100% feels like it was written by a bot or by some Rivian lackey.
I really wonder why it takes founding a company to find out a market is too small. 😂
I really want the R2, but only if it comes with the D2 option package.
So, Rivian will be better off if they do not sell any cars? I think we found their path forward!!!
Honestly, this may be their best shot. They could buy back used ones for low, stop production, and re-sell them higher while working on R2
They should sell just vans and focus on bringing the cost of them down. This is a huge market.
The electric vans will save Rivian and other things I tell myself so I can sleep at night
😂😂
@@marko5876 It is bizarre to me why they needed to go into the consumer market that is dominated by Tesla, when they have a unique product, vans to sell to corporations wanting to reduce their carbon footprint.
@@femaledeerTotally agree. Fleet sales have a lot of advantages over the consumer market. They shot themselves in the foot by jumping into the consumer market and not expanding the commercial market first. They probably could have achieved profitability there first, and brought down their battery while expanding their market share.
@@atomicsmiththe chrysler group is held alive by selling Promasters and Ram trucks, fleets are very profitable
@femaledeer YES! I am a Tesla driver, but have a small small Rivian investment. My career is brand/general management. Before even starting to learn about all the awful handling of their business, I was bringing up to colleagues that they must be horribly run to be unable to pick commercial or consumer and dominate it, rather than shitty launches into both.
Rivian isn't going to make it in this new economic reality. Tesla was able to leverage nearly zero interest rates to bootstrap. Rivian doesn't have that option and the overall failure of automakers to sell EV's is going to make partnerships impossible. They aren't going to make it.
Sad but true. I would have liked their hatchback but if they can't make a profit on big trucks, they won't be able to compete on the 🥜 either.
In Europe our automakers are starting to sell 23 to 25K € 🔌 🚗 at a profit & Tesla model 2 is on the way, with the FSD software almost ready. Then you have the Chinese competition for those who don't care about brands...
Everyone else will be wiped out.
@@mystisith3984 if you truly believe FSD software will ever be delivered as advertised I have a bridge to sell you.
Tesla received Toyota and Mercedes $
Are you sure about that? I seem to remember Tesla had some very expensive debt which they paid off soon as the Model 3 dropped. Also remember something about paying off govt. subsidies and taking a huge hit so they could repay it earlier.
Rivian is also simply moving WAY too slow. It took them 9 whole years to bring a single vehicle to market, which is just absurd. They had plenty of time to get into the EV market back when money was cheap, but they squandered it.
I saw a Rivian in Alabama it was a Trade in for a Honda. I was getting an airbag installed on a 2004 Civic I paid 1,200 bucks for cash. Seems to me 100k invested in T-bills is enough to pay for gas and insurance. No range anxiety either.
Pick up a small collection of vintage Porsches for $100k.
From layout to management, I feel it is a shaky company.
I actually saw a Rivian car in the wild the other day. I felt like I saw some sort of mythical creature.
Just got back from a ski trip in California, r1t’s and s’s were more common than Range Rovers and Escalades. First weekend ever where I saw more rivians than teslas.
I've seen THREE where I live, and I'm in an area with less than 100,000 people
I’ve seen lots of Rivian in the rich neighborhoods
We have a bunch in west LA
I see them all over the place.
I think Amazon won't let them die..
Even now that bezos is long GONE and selling off multiple billions in Amazon stock annually? 😀
Then they will have to buy them outright.
Amazon will buy from whomever buys the trucks. Or switch to GM.
They won’t
The hole rivian is in financially , is to deep even for Amazon, I don't they want to lose millions over a EV truck supplier they are already losing interest in
Afer the shutdown, the standard battery pack with be LFP IMO which is much cheaper, and geopolitical uncertainty affects supply as well as interest rates and consumer confidence, but go ahead short the stock
Apparently the automotive business is a tough one. I love the Rivian R1S but who is going to pay $100K for a car from a company that may be out of business in a few years? Also - how about the horror stories about how much repairs cost? What do you think your insurance premium will be on that baby?
They're currently around $75k area. Which unfortunately is compatible to many new trucks. Hell the Tacoma TRD Pro is coming in at $65k in many places and that's a smaller/weaker truck
It's crazy how much EV demand is dropping. Not even Tesla can avoid the damage
Didn't a major rental company recently admit that their fleet of electric vehicles have an 80% higher maintenance cost?
All car makers are having issues rn
@sn5806 Hertz
@@john-michaelsmith6814yes but not to this scale though, unless you’re referring to EVs only. Then, yeah, probably all of them are having the same issue. It’s EVs, artificial hype, plus free money is what drove this market, but with that, slowly, becoming a thing of the past EV market is drying up, because the market simply doesn’t want it. Every vehicle is a niche vehicle, trucks have their purpose, SUVs have their purpose, but the EV market is super niche….
There was never market demand to begin with. Tesla and the others are entirely a government creation. Without government largesse they wouldn't exist in the first place because they're a niche product at best. Demand is tiny in the grand scheme of things.
The geopolitical uncertainty may have to do with the fact that a lot of the materials they use to make the cars (especially the batteries) come from overseas.
No it’s just a lame excuse. The fools already bought theirs and that’s it.
Love your work.
Please do an update on DWAC now DJT.
The vehicles at the preorder price lose $30k each car, not rivians at the new pricing.
^ this, and preorder pricing is going away Q3. There's also barely any preoder holders left compared to new buyers
I think you’re wrong about this one. Rivian is def going to make it. They have alot of contingencies.
CFO’s commentary on having the full suite of offerings by Q4 2024 was a hint at the R1X, which will help drive/maintain higher levels of ASP.
First thought, you could start a teala modding company with better margins than rivian.
Everybody's a CEO.
The absolute last thing the environment needs is a bunch of hundred thousand dollar 6000 pound electric SUVs.
Thats what the ppl want huge over wight cars cant blame car makers for making whaat the ppl want
Environment?
But they're green and run on renewable!
@@LuciFeric137 not 100 but greener than gas for sure
@@mcsike7264I can absolutely guarantee that my lightweight and highly efficient S2000 has contributed far less to climate change than what it took to build one of these behemoths.
great breakdown! well done.
Hope they can pull through like the R2 R3X and I’d love to buy one. I’ll decide in 2028. If Rivian is in a solid place or at least looks like they will survive. I’ll buy a R2. That also give them time to work out and early issues
Where do you take a Rivian to get maintenance?
You wait 6 months in queue at a Rivian center
That’s what I thought…
They drive to your house and work on it in your driveway, unless there's as real problem, then god help you.
You take it to one of those phone screen repair places and they tell you how f***ed you are
When resale values are as good as a Toyota Tacoma, give me a shout. Good luck!
Or when when cold weather doesn't effect it, lol. We had to tow a few ev's.
That will happen for all BEVs sooner than you think. ICE cars last 250K mile or 12 years on average. I expect BEVs to last double that soon. They're so much simpler, and battery life is rapidly improving. BEVs will routinely do 500K-1M miles eventually.
They might be losing money on each car, but they can make it up in volume.
You made my day!!!! My old boss would jokingly (but with a straight face) say that when a competitor (that was notorious for bombing jobs) would bid a job below our cost.
No they can’t? They’re not selling enough to make it up in volume ?
@@tfpnation6925 No, they can't. They were losing $125,000/vehicle when they were sold out. They are now losing $40,000/vehicle, and they cannot sell them. But they are consistently losing nearly $6 billion per year, for the past three years, no matter production or sales numbers. They are not shutting down in Q2 for 'retooling.' They are closing the doors for bankruptcy and allowing the management that owns 28% of shares time to dump and run.
@@tfpnation6925 Wow. Nothing goes over your head…your reflexes are too fast.
Smh 🤦🏽♂️
@@_Chev_Chelios wait was this a whoosh moment, are you using sarcasm 🥲
The problem for them is that making cars is expensive and takes a huge amount of capital it's not a software business. They need to cut costs vertically integrate and build scale if they're going to survive. Having a good car isn't enough
Ultra modern assembly lines are mandatory to be cost effective. Producing cars the old ways won't cut it anymore.
Can someone please explain to this guy the idea of marginal cost, economies of scale and barriers to entry
Too funny. Increasing the assembly line speed 30% to save money. That would work if workers now are working only 70% of the time. To increase the speed 30%, they would need an enormous investment in robotics and more employees which would increase the cost .
Rivian vehicles are so great from a engineering standpoint. Hope they make it
I want one of those Amazon vans to turn into a off grid camper
You want an electric vehicle for off grid living? U know how long it will take to charge it with solar panels?
I don't think people realize just how much power it takes to charge an electric car battery
I honestly did not expect the Amazon delivery vehicles to be cheaper than their regular cars for non-commercial operations, what other sector works like this where industry/commercial things cost less than consumer goods?!
TBF those delivery vans don’t need to be very high performance or feature-rich compared to a high-end truck or suv. If we compare what a Ford Transit van or Dodge Promaster sells for compared to a Lincoln Navigator or Ram 2500, the legacy automakers are also selling their higher end vehicles for more than their delivery vans.
Happens quite a bit. Large companies will use their ability to purchase in bulk to leverage a huge discount. It’s the same principle of when you get a giant bag of chips for Costco. This isn’t rare at all if you look into companies.
Only bad companies that won’t last long, or get bailed out will pay more, and of course the government itself.
Most companies sales divisions have special sales staff that only deal with big fish candidates, and they specialize in smaller books of business, with high quality service, and large decreases in per unit costs, and other special benefits thrown on top.
@@Walter-mc8uogood lord I have driven both and have had nothing but issues with both cars for the last 6 years. I told my boss I want a Subaru because I’m sick of crap breaking. My transit has 26k on it now and my coolant temp sensor failed and I had it repair and a day later I’m having the same issue.
litterally every industry/sector works like this, what on earth are you talking about. companies buy in bulk. so of course they get better prices
Not sure where he heard that but unless Amazon is buying them for cheaper and reselling them to Amazon DSPs that just isn't true. They cost $150k to DSPs.
all dealerships charge some level of delivery charge, even if its getting delivered to the dealership.
Bravo Sir thank you
Great video!
I think the R2 looks great. I'll be switching from the Tesla model 3 to the R2 in a heartbeat if they can get it to market. And it seems like I'm not the only one.
It will be long bankrupt before that
@@Rapido20 It's possible. But Rivian has said they have enough capital to get them to the R2 launch. Time will tell. If they get R2 to market they'll be more than fine.
You might want to borrow one and live with it for a while before assuming it's going to be good to own.
A $100,000 truck was not a good idea. It was not long ago that that was supercar money. Oh I see...
GMC should know this too
Yeah a few years ago 100k for a car could get you a audi r8, now that car is on 160k. Its the hidden inflation really
@@porcus123its not hidden.
Even ICE cars above $50K are sitting on lots....
@doodler2d8 ice cars are relatively material cheap
I really like Rivian, I hope that they can make it through this. Tesla and Rivian finally give us a breath of fresh air for American auto manufacturing.
I see so many of these Rivians in my hood. Blows my mind, I don't know who would rando risk 90k on some company that just came into existence like last week.
YOU underestimate Rivian LOL Their valuation taking a nose dive was the BEST thing to happen to this company! I'll come back to this video post in due time ;)
Heard from multiple folks who buy cars like this is that they try to “park” some of their money. Not sure how smart that is but that’s what I’ve heard.
Absolutely wrongheaded. Everyone knows that cars start depreciating in value the instant you drive them off the lot.
“Parking” as in investing? In an electric car? It’s not a 911 GT3 RS or Ferrari.
Couldn't help but laugh from that intro 😅❤
Do you think that the R1 refresh will reduce the COGS? Enough to make the R1s profitable?
I was at Easter Jeep Safari 2024 this past week. There was a guy with a Rivian R2 SUV off-roading it. It was very impressive. He even got some dents on it. It's cool, but I'm not running out to buy one, and neither is anyone else that was out there.
R2 or R1?
@atomicsmith R2, I believe. The newest smallest version, SUV they have.
Hopefully the battery pack has a heavy duty skid plate
Have you seen the R2? Go see it first. Rivian has close to 10B in the bank. Vanguard and T Rowe just invested millions quietly into Rivian. What kind of analysts do you think they hire? With the new GA factory not being build we will see the R2 much earlier. Keep making these video it helps me to buy stocks at this level 😁
Good comment. Change “not” to “now”
@@2ndLife888 They are closing down production lines now for 2-3 weeks. I think they retooling for R2 production. Time will tell,
I bought some stock for the long term when it dumped a few weeks ago. Thinking of buying more. Once the R2 & R3 hit the road, that will be all the advertising they need and everybody will want one. 🙏😀
@@2ndLife888 I'm a long term Rivian owner, long term almost 2years. It is by far the best car/truck I have ever owned. Was it perfect no, but the team has made an excellent effort to fix some minor issues I had. All in my channel. Now I got 30K miles in my truck and it's running perfect. I get more range then advertised. Comparing Tesla support to Rivian's support is like comparing a unhinged uncle that is high and drunk all the time to a Grandma that has everything under control. Haha.
@@2ndLife888 Regarding shares, it's everyone's individual risk taste and choice. I personally have been adding shares every week down to $14 average. Will be adding more next week and the next. Vanguard has 7% ownership now after the recent purchase and T Rowe 10%. Total of 66.69% of institutions owning Rivian. Tesla 43.7% ;) Just saying.
Could you PLEASE do one of these on Lucid Motors as well?
Not one nickel of tax money should ever be used to incentivize car purchases.
The reality is it’s not just Rivian that’s in trouble, it’s entire EV industry. This Apple cart will crumble once all the subsidies dry up. The value proposition is just not there for EVs at this point. The industry was propped up by governments around the world, particularly, the US government.
I agree up until 2024. Now we are seeing that Tesla has hit price parity while making a net profit.
@@crispeterson5080 - Nooo…Tesla is slashing prices. They’re even offering free FSD package for a year now.
@@donyakusa9187 they may be dropping prices, but they still make money. I haven’t seen any FSD for a year though. Free month for all, yes. They are training their AI
What does this have to do with the Apple Card ?
@@tfpnation6925 - You know it’s a typo. You’re trying to be a smarty pants.
We always forget we are flying…. On a rock. In the middle of nowhere. Don’t take life too seriously.
I wonder if starting with the R3 and R2 would have been a better way to go? A more affordable vehicle to increase volume?
Wouldnt a smaller vehicle only use a smaller battery, which i hear is the most expensive part of the car? So if the battery is smaller then the cost is lower?
There are so many rivians around me it's insane.
It's a badass looking car.
Are you on the West Coast? lol
@@aroundtheworldtoo no MD
Rivian CEO: "we've seen historically high interest rates..." is he joking? Rates are at the low end of normal.
Yep. 6% in 2005. Must have some weird definition of “history”.
It's actually very common knowledge interest rates are up over the past year especially on car loans.
I saw an Amazon Rivian vehicle broken down along the highway today. I'm not sure what was wrong with it, but somebody isn't getting their Prime delivery today. It had the emergency lights flashing and I assume it was waiting for a tow back to the Amazon DC.
Great story, no one’s ever seen a broken down delivery truck before. Rivian must be doomed.
This actually brings up an issue with electric vehicles that you do not see everywhere. That is the fact that if the company that sold you the vehicle went out of business, your vehicle just might not work anymore. Sure we may get similar things from much more familiar brands, but those brands have been around forever and there is still plenty of vehicles on the road that do not require such things
Rivian wanted to outdo Tesla in their luxury -> medium-luxury -> medium -> cheap car route, and not only that, they wanted to do it years after Tesla was established brand.
Reality kicked in, and there is just not as much *luxury pickup* market as they thought, and it's still performance first.
Cybertruck might not be amazingly superior in performance, but Tesla is making a lot of money on them due to the _risky_ design they invested in.
Top-down approach in car manufacturing that Tesla had only works when there is very little competition.
Chinese companies like BYD started with bottom-up approach - making affordable and semi-decent cars, to later expand to other pricepoints - and it's visibly the best approach you could have in competitive market.
*IF* it really costs Rivian >100k$ to manufacture a single car, they'll probably go bankrupt soon - there might be not enough margin to lower production price to below 40k$, which is what they need to compete now.
Wait couple years into the future, and with super cheap LFP or Na-Ion batteries for
Are people high? You think the cybertruck is performing well for Tesla? The thing that costs too much to manufacture. The vehicle that isn't crash rated, and can't be mass produced. The truck with a bed that can't fit a full sized bike, or that isn't truthful about it's real range? THAT truck?
The one Elon directly stated in a call with investors isn't going to sell well for years until manufacturing can pick up. It won't of course because there's no demand for them. They sell for twice as much as originally advertised, and don't perform to the level advertised either. They are literally already rusting.
@@MuShinnen I'm unsure if anything you wrote is true.
Batteries in large cars were generally 30% of production cost. Cybertruck has 123 kWh battery, which would cost them 12,3k$ at currently conservative 100$/kWh.
12,3/0.3 = 41(k$) in production cost.
Entire Cybertruck was build with low cost, Elon literally bragged how many steps they can skip with current body design, and how much money would be saved, even at low volumes.
Pre-covid they estimated they could sell one without loss at 40k$, and so far, Tesla has *not sold any car with at a loss.*
50%* more than originally advertised, that's just straight up lie that can be disproven with 5 second search.
Also they're not rusting as far as I know - if they rusted, they'd rust at the welds/creases, where most stress is located and creates galvanic cells with unstressed parts.
Random "rust" spots would tell me it's just dirt that doesn't easily come off, or piece of metal which stuck onto body which started rusting (galvanic cell).
@@MuShinnen Also forgot to add - Tesla is selling EVERY Cybertruck manufactured, so saying it's _not performing well_ is lolcomment.
@@michahalczuk9071 Google is free. There are plenty of sources with the recorded conversation from Elon. They were originally supposed to sell for 40k. They sell for twice that for the base model. Fully specced versions are 100k plus. Elon has bragged about a lot of things to idiots who will believe him. He did not however brag to the actual investors when they asked when the cybertruck would make a return. He said it would take years. They can't even produce the things to a consistent quality in terms of panel gaps. The things creak, they are not crash rated, and glaring flaws in the design can be seen a mile away. Like being able to peel a potato with the edge of the door because it's that sharp. Or the fact that the headlights tilt upwards instead of face forward. This effectively means they blind oncoming traffic. There's a reason we don't make cars out of stainless steel btw. You'd think a self proclaimed genius would have taken lessons from the Delorean.
You claim things can be disproven with a 5 second search, but can't be bothered to do your own research to hear the very statements made to the investors? Odd. They are rusting. YOU not knowing about it doesn't magically mean this is untrue. There are photos from proven owners with their untreated, uncoated, stainless steel death traps showing early signs of rust.
@@michahalczuk9071 It is objectively not profitable. We've already heard the projections. Every truck manufactured means nothing when he can't produce them to scale. Excellent job liking your own comments btw. Every bit as sad as desperately clinging to the idea that the cybertruck is some sort of sleeper hit product, and not an idiotic tech boomers idea of a utility vehicle without the utility, design, or performance of other vehicles or supposedly preceded in development. The Rivian truck absolutely embarrasses this low poly joke.
This will get even more interesting once BYD starts to compete in the US market
I'm pretty sure that won't be aloud to happen
@@VaunShiz I'm pretty sure that they can assemble the cars in Mexico to get access
Never
once BYD get access, it's over for the major car companies too. if Trump stops them building in Mexico, they will simply build a plant inside the US. they can't be stopped.
You mean once BYD starts dumping subsidized cars into the US?
We’d be idiots to allow that.
My first thought is that it depends on the cash they have. They are trying to tell the same story as TSLA to their investors: that they can just grow into profitability.
They might not make it because of current market conditions or saturation on the EV market, but they still have some announcements in the playbook, like going to other markets like Europe or Asia... Anything to string along the investors, buying time, and hoping they get to profitability.
I live where these were first made. Cybertrucks, Teslas, and Rivians everywhere. They’re just another rich persons car until the cost comes down and the reliability goes up
Why don’t they make a small lightweight sports car for city use? Instead, they do the typical American thing and build a giant house on wheels that weighs several tons and is far faster than required (especially given the very limited driving skill of the avg SUV driver).
Pickup trucks, especially small ones, do sell well but a little sedan would be a good addition to the lineup. The problem is more the price range 80,000 can buy a nice BMW, Lexus or Mercedes.
Small lightweight sports cars barely make any profits. Same with small and mid sized sedans. The profit is in high end SUVs and trucks. Ford makes its money off $90k King Ranch F-350s and $80 platinum F-150s. It’s why the only car they sell anymore is the Mustang.
If Cadillac wasn’t selling $150K Escalade barges they’d be gone.
Even the Japanese make most of their money these days off SUVs.
It makes perfect sense to start out selling high-content trucks and SUVs when you have a high cost high tech startup vehicle.
Because when you have a family with kids, especially more than 2, that doesn't work. And since the government banned station waggons and other family suitable cars, SUVs are one of the few remaining options.
Dumpster fire 🔥
i'm buying shares nonstop...
It's a V6. Well, it's actually a V8 but two of the cylinders are disabled by software until you pay to unlock them.
I'm on the fence whether or not I should invest in Rivian. The R1T and R1S are great. R2 is an appealing product as well, though it won't be released for another 2 years and it is questionable when the firm will break a profit, if ever..
Frankly I think I would short before I went long this company, although I grant you that their products are cool, so honestly I'm not betting for or against it. But selling a nice product at a loss can only go on for so long, eventually you have to find enough customers who actually want to buy what you are selling at a price that is profitable, and I am not sure that exits. Especially given all of the competition they have, and all of the issues electric vehicles are having at the moment.
There's no reason to invest in Rivian.
Didn’t it take Tesla 9yrs…the new offerings look appealing but 2yrs is a red flag and it’s looking like it’s a play for investors to pour more money.
IMO Riven is a company built on the past. It was designed and built in the time of cheap money. Savings accounts would net you 0.25% APR. As the boomers are retiring and altering their financial portfolios, money is getting much more expensive. This is a change Rivian will not survive. If you had billions in your checkbook, how many Riven cars would you have to buy before they even broke even? 10,000? 100,000? 200,000? Let's say they would break even on the 50,001 car. Ok, they stopped losing money, how long before they can dig themselves out of the pit of debt?
Why would you invest in the high risk minimal potential reward of Rvian stock, when the low risk very high potential reward Tesla stock is at bargain prices right now? Go watch some V12 FSD videos and think about what rapid progress from this very good level they have today means for Tesla stock in the future.
Elon months ago said Rivian and Lucid will run out of cash unless they can cut costs and will go bankrupt.
Wasn't that back in April of 2022 he warned them? And got sh*t on for it by the lame stream m3dia=the brutal truth hurts! 👍🏻
Now whose laughing as rivian and lucid combined have burned a staggering $29,000,000,000+just from 2019-2023 per forbes. 😂
Good video 👍
I've always wondered why Rivian selected a very small market to sell to, ie outdoor/adventure. Why not take out the off road features and sell a family car?
Subaru playbook is similar and they sold over 600k in the US last year...
@@kootenayevfamily4208 true, but a Subaru is available for under 50k
I guess because other carmakers are already doing that, and they don't think they can compete, which seems like a reasonable view. Personally I'd have thought that light electric vans are the way forward, few others are doing that, and I'd have thought they are easier for a startup to crack because you generally don't need to bother so much about the luxuries and fit and finish like with a car. But at least Arrival in the UK were doing electric vans, and failed, so perhaps not.
As an engineer, giving you a good hardware and not allowing to do its best unless you pay more is normal
Wow
@@elochukwuuzoeto525 it's long to explain, but it's kind of justified
Ok so as an engineer does it make sense to charge less for the same cost of goods when the only difference is a software tweak?
Does it make sense to haul around extra dead battery weight?
The only way this decision makes sense to me is if Rivian hopes to sell upgrades or subscriptions to get access to the higher range. Which doesn’t sound like a great plan because consumers already hate the subscription ideas the legacy manufacturers have tried. (“No I don’t want to pay BMW $15 a month to have my heated seats work”).
This is typical of new companies and the author knows that. Focus on innovation drives costs. 2020 was the first time that Tesla turned a full-year profit. Previously, net losses had begun to accelerate in 2014, and so did research and development (R&D) expenses. This video is a hit piece with ulterior motives.
Are they still building the new plant in Georgia?
I feel your analysis is missing a few things:
- they appear to be fine on demand still, as they sold almost all units made, and at this price point, sold the 2nd most EV vehicles in Q1 '24 in the US and almost matched Tesla's 17k units, which included S/X & the CT (I realize this info came out after your video, but worth mentioning)
- average ASP has been dragged down by pre-March '22 purchases who received a fairly significant discount; those will be gone by the end of Q3 this year, so that will stop impacting ASP
- there are rumours of a higher-trim coming out, which would also raise ASP
- the R2, much like the 3/Y, has been designed for mass manufacturing; similarly as Tesla manages to sell a "dumbed-down" Model S - i.e. the Model 3 - for a profit, I have no struggle imagining Rivian selling the R2 at a profit as compared to the R1S (and why you kept focusing on it "only being 15% smaller" is odd; it isn't really a relevant point aside from the slightly smaller amount of body panel material required)
Your premise is wrong. You’re using their entire loss as a company, a start up, and claiming they’re losing that much on every vehicle they make. It doesn’t cost rivian 137k to make an R1. If you want to look at it that way by adding every expense and dividing it by cars, it’s pretty reductive and misleading, but okay. They’re in trouble yes, but not based off your premise. It’s a tech startup. The product is sound. They will lose tons of money until (if) they become profitable. That’s how it goes with most startups including….. Tesla.
That’s not the issue. The issue is that even their variable costs vs sale price are still negative margin.
They don’t lose 30k on each sold. More like 5k. But it doesn’t matter. The more they sell the more they lose. Tesla was never in that position. Just their raw materials and manufacturing cost put them negative per unit. Plus their overhead / fixed cost is HUGE - somewhere around a billion per quarter.
If they can’t even sell a unit at a price to overcome variable costs for that unit, let alone even come close to paying down their fixed costs, they’re in big big trouble
Yep this dude is a doom shiller lol
Ah yes. Grifter logic.
In the intro they say the loss per car is $43,000
Theyre not at a break even point. When are they expected to turn a profit? Theyve invested 90k per car in R&D that number will decrease as they continue to make cars but they're also losing another 43k per vehicle. So right now their loss per car is 130k+. That number might go down over time but it might go up too. The new car will need to make up a significant portion of those losses but theyre moving less cars than expected. Theyre also cutting costs and have expected factory shutdowns. Its not an optimistic outlook while theyre also cutting costs on their products.
Most people who want a pickup truck also want a big gas or Diesel engine. Notice that Tesla has found success selling electric *cars*.
The Cybertruck has an order book of 2 million. How is that not success?
Rivian expected a few more years of free money. How many people will buy a $70k+ truck that is only competitive at above $80k.
The Cybertruck removed Rivian's runway.
@@External2737 The Cyber truck is not really competing with Rivian. There may be some overlap, but it's a different beast altogether. And just because there are a lot of pre-orders doesn't mean people will actually end up buying them. Also remember that what was promised (and what a lot of the people preordered) is not the vehicle that is actually being made.
@@ian3580 It is another EV truck drawing attention to the market. Rivian is interesting, but only because they are willing to take losses. The market has matured.
@@External2737 Except that they aren't remotely going after the same market. The Cybertruck isn't even much of a 'truck.'
Take a look at the adventure gear available. Look at what Tesla has as a camping package (tent) and look at Rivian. Look at the utility of the two vehicles for adventure or light truck work.
And Cybertruck hasn't stood any test of time, where the R1T has been out a while.
@@ian3580 We will have to disagree. The Cybertruck is the first truck I want. By definition, it does everything well I need a truck for. Now, it isn't a replacement for an F250, but neither is the Rivian. Among my truck buying friends, it is in demand.
I believe, once Cybertruck hits volume production in 3 engine options, half of each market will consider the other.
Competition is good. This is a Marathon, not a sprint.
They need to fix the expenses of the current models. But there is also the economies of scale. Means with larger quantities the expenses could go down (depends how they calculate/distribute fixed expenses to each vehicle).
As the brand is established (but it depends if manufacturers see a future for E-vehicles) a buyer (Bezos, Ford, GM etc) could step in.
lol, exactly what year since the first human picked up a pointy stick was there not geological instability?
its seems like you start with a conclusion and gather data to support it. Huge holes in analysis, Rivian isn't doing great, but its not a dumpster fire either. Look at fisker if you want a dumpster fire
Man,Im about to invest in Rivian…dont tell me that😅
They'll still take your money 👍🏾
3:58 A lot of elites(in governments & corporations)living in their bubble world just don't understand their customers.
I've just reserved an R2 - I like it.
Its not that people dont want to buy them😅 people that can afford 100k ev, already pay 50% taxes on their salary😂
True. this is the biggest problem about many EVs - They're expensive. I'm glad that the likes of Tesla, BYD, and many other Chinese EV makers are in the market to change that narrative. Otherwise, almost nobody will buy EVs. I'm also happy that Elon Musk is making money from his company.
Lets make up tax rates that dont exist!
Purely speculation on my part, but I think one of their biggest issues is that Rivian outsources all of their production. As a result, it is difficult for them to manage the production costs of their vehicles, but I think they did this in order to scale quickly and bring product to market as soon as possible. They need to build their own production lines and factories in order to reduce their cost in order to scale.
They are outsourcing production? I was just about to comment that their production line appears to be similar to the big players so production can't be their problem. Well, they seem to have more people on the production line.
@@phyotyla... correct... rivian's plant is in normal. IL
No they don't... are you thinking of Fisker?
They have really cool cars I hope they survive
I’m wondering what part of nobody wanting one they can’t grasp. 😂
7 views fell off
It says 1,175 views.
No wait it says 1,321 now.
Bro fr only 2k views rly fell off 😔
Could Tesla build the R2 and sell it at a profit for $45,000? Probably. Can Rivian do it? Seems very unlikely. It takes time and a huge effort to find all the ways to reduce production costs that Tesla has found. Another issue is time and capital, it takes a lot of money to ramp a mass market volume car to profitability, the Model 3 almost took down Tesla despite their still making profits off the S and X at the time, and Rivian is burning money fast. It will be three years if everything goes perfectly for Rivian to fully ramp the R2, or at least to ramp in their existing plant, and then still longer to finish the new Georgia plant and ramp there too. Basically, Rivian needs probably another ten billion more than they have...Finally, the Osborne effect, many will not buy their existing models and decide to wait for the R2...
If Rivian finds some extremely wealthy and risk loving investors this may all turn out well in the end, but that seems extremely unlikely.
Totally agree here.
At 106-121 kWh batteries that don't need to be ultra-high density at today's bulk price the entire pack would cost maybe 7-8k$ tops, and maybe 10-12k$ if it went above 200 kWh.
What the fuck is Rivian wasting all the rest of that money is a mistery, but most likely it's just inefficiencies coming from startup company.
If they started wtih something very basic like Cybertruck, and tried going up from that, they could probably have succeeded at making it cheap.
But they didn't so yeah.
@@michahalczuk9071 Lol, something very basic like Cybertruck...uhm, which is a car no other company could possibly make in their wildest dreams...filled with more radical innovations than any other new product launched in world history...
Rivian and every other new EV startup have no real path to success, unless they are in China where the path includes the government helping them a lot. Automotive startups fail as a rule, Tesla was the first to not rapidly die in America in almost a hundred years. They cannot enter the market with a bare bones vehicle, it will not compete against what Tesla and others offer. Starting off with a great car is very hard, and hats off to Rivian and Lucid for getting that done, but the second problem is production costs, and that depends on scale of production and on production technology and knowledge, and on designing the car for lower costs of production from the start.
Tesla has the top selling car in the world, no startup can hope to match their scale of production at all, and while Tesla started out with some large gaps in their knowledge of how to efficiently manufacture cars, in 2017 they bought Grohman, the leading automotive automated manufacturing engineering company in the world. Then Tesla added their own elite software and hardware engineers to the leading most experienced team of engineers in the world from Grohman...and now these startups think they are going to compete on both quality and price against Tesla, who went on to gain lots and lots of experience after that too? No, the startups can either make an inferior car at the same price, or a competitive car at a higher price, or they can sell at the market prices set by Tesla and lose a huge pile of cash on every car.
As far back as 2015 I was writing that I did not see how new startups were going to come to market in 2018, as they then hoped to do, and compete and survive against Tesla. Internally, Tesla estimated that anyone including legacy automakers had to be selling EVs by 2014 or they would be too late to ever compete with Tesla.
@@tribalypredisposed I meant general design/construction, in which Cybertruck is really basic.
Not speaking about things like sensors or internal architecture like gigapressed parts, because that really doesn't matter here.
Bulk of cost is just going to be the car construction in this regard.
Rivian basically tried starting up super expensive venture with 0 sales and no experience.
At least Tesla Roadster was semi-custom, done on modified Lotus Elise, and it was still difficult to profit there.
@@michahalczuk9071 Yeah, but again, Tesla had that option at the start because no competition at all, Rivian, who would buy a really simple basic car at the same price of a Tesla now? They had to make a great car and it had to be luxury priced because low volumes when first ramping your only path possible is to start with an expensive EV and then go for mass market later.
@@tribalypredisposed Rivian literally had only one option - make cheap truck that is competitive.
Trucks are literally performance only - put large battery in, make cheap construction and you have a product.
5:37 so - they’ve added software to limit the range and are selling it for less. That means the cost for the truck stays the same, while they make way less sales revenue. Thats beyond stupid
They either need to get the price down to 30-40k range to be competitive or be ultra premium sell as a status symbol.