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Rivian is investing aggressively to ramp up production to ~1M vehicles/year by 2030. If average selling price per vehicle in 2030 is more or less similar to Te

by cs702 5y ago

Rivian is investing aggressively to ramp up production to ~1M vehicles/year by 2030. If average selling price per vehicle in 2030 is more or less similar to Tesla's today -- call it $50K/vehicle, to keep the arithmetic simple -- then a market cap of $100B today is equal to ~2x the annual revenue forecast for 1M vehicles in 2030, assuming everything goes well and there are no major hiccups along the way. These figures strike me as as extremely over-optimistic, to say the least, but at least I can see how smart people might be rationalizing the purchase and ownership of Rivian stock at this valuation to themselves so they can sleep soundly at night.[a] -- [a] I mean, it's not impossible: Tesla's run-rate production and sales now exceed 1M vehicles/year, and the new Tesla gigafactories already built or being developed are supposed to bring production to 4-5M Tesla vehicles/year well before the end of the decade.

ardit33 5y ago
They are playing in the 70-80k+ luxury truck/suv market. That type of market doesn't have the volume they are aiming. They will have to build cars that compete with the mid tier (40k-50k) to be able to sell on those volumes. At that tier you are competing with every other manufactor, from kia, to ford, to VW, Audi, GM etc... Their truck looks nice, but just not sure they can support their current evaluation with such a limited production.
- samstave 5y ago
  >>70-80k+ luxury truck/suv market. Have you actually be shopping for a truck lately -- that ~70-80K 'luxury' truck makret is lit what every single truck manufacturer is playing in... Its SICK.. Trucks should be FUCKING TRUCKS - machines used to haul shit you cant carry as a human - nothing else. Not only are they extra expensive - they are 90% plastic!
  - sojournerc 5y ago
    Used fleet trucks can serve this market, but even they get snatched up for too much these days. You can pry my old jeep cherokee out of my cold dead hands. Among the last vestiges of a simple, rugged, affordable, vehicle that serves a purpose well without bells or whistles.
    - samstave 5y ago
      So I looked into used fleet trucks a tiny bit... yeah some of the rental car companies inventory is no cheaper than any place else... Those trucks may as well be sold at a brand new lot. $43,000 for a rental car fleet off-cast? No thanks.
- cs702 5y ago
  I agree: they would have to move downmarket over time, following Tesla's playbook. That's why I guesstimated $50K/vehicle by 2030. It may be an extremely over-optimistic goal... but it's not impossible.
luckydata 5y ago
Big part of the valuation is the partnership with Amazon for commercial vehicles which you don't seem to be considering. Those vehicles are in the 100k+ price bracket.
- mdorazio 5y ago
  No, they aren’t. I unfortunately can’t tell you how I know due to contracts, but I am 100% sure you are wrong about the price and the implied assumption that Amazon will only buy from Rivian. Also, commercial van margins are nowhere near as good as pickup margins. The van is a cash flow generator, not a massive profit center.
  - luckydata 5y ago
    unless you work at Rivian in finance I don't think so.

by cs702 5y ago

ardit33 5y ago

They are playing in the 70-80k+ luxury truck/suv market. That type of market doesn't have the volume they are aiming. They will have to build cars that compete with the mid tier (40k-50k) to be able to sell on those volumes. At that tier you are competing with every other manufactor, from kia, to ford, to VW, Audi, GM etc... Their truck looks nice, but just not sure they can support their current evaluation with such a limited production.

samstave 5y ago
>>70-80k+ luxury truck/suv market. Have you actually be shopping for a truck lately -- that ~70-80K 'luxury' truck makret is lit what every single truck manufacturer is playing in... Its SICK.. Trucks should be FUCKING TRUCKS - machines used to haul shit you cant carry as a human - nothing else. Not only are they extra expensive - they are 90% plastic!
- sojournerc 5y ago
  Used fleet trucks can serve this market, but even they get snatched up for too much these days. You can pry my old jeep cherokee out of my cold dead hands. Among the last vestiges of a simple, rugged, affordable, vehicle that serves a purpose well without bells or whistles.
  - samstave 5y ago
    So I looked into used fleet trucks a tiny bit... yeah some of the rental car companies inventory is no cheaper than any place else... Those trucks may as well be sold at a brand new lot. $43,000 for a rental car fleet off-cast? No thanks.
cs702 5y ago
I agree: they would have to move downmarket over time, following Tesla's playbook. That's why I guesstimated $50K/vehicle by 2030. It may be an extremely over-optimistic goal... but it's not impossible.

luckydata 5y ago

Big part of the valuation is the partnership with Amazon for commercial vehicles which you don't seem to be considering. Those vehicles are in the 100k+ price bracket.

mdorazio 5y ago
No, they aren’t. I unfortunately can’t tell you how I know due to contracts, but I am 100% sure you are wrong about the price and the implied assumption that Amazon will only buy from Rivian. Also, commercial van margins are nowhere near as good as pickup margins. The van is a cash flow generator, not a massive profit center.
- luckydata 5y ago
  unless you work at Rivian in finance I don't think so.