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I don't see how this company or other smaller EV companies can compete at the scale a lot of investors think they will be at in the next few years. Tesla had f

I don't see how this company or other smaller EV companies can compete at the scale a lot of investors think they will be at in the next few years. Tesla had first to market advantage as well as autopilot to put them at the front of the market, but these companies don't have any of those advantages. How are they going to compete in the market against Tesla, Ford, VW, GM, Daimler and other big auto companies who are going to be flooding the market with their EV over the next years and out scaling them do to having massive amount of cash, infrastructure, and supply chains already built. While Rivian will be stuck spending massive amount of cash to build infrastructure and supply chains all while playing catch up. Ford is already outselling Rivian trucks and SUV with their Lighting, and Mach-E models all while being a profitable company. Rivian is already valued at over half the value of Ford. Where do investors see the growth?

echelon 4y ago
While I agree that it will be difficult for smaller EV startups to compete against the whole market, this line always stands out to me: > Tesla had first to market advantage There is nothing that makes Tesla a monopoly. At the time the Ford Model T was itself in Tesla's shoes, it used to come in only one color. Competitors quickly filled in for unmet market demand and introduced lots of options. Just like Ford, Tesla will not be able to meet the demands of every consumer, irrespective of their current production capacity. Plenty of industrialized nations have a vested interest in their automotive industries and will do whatever it takes to help them along and grow to be competitive. Vehicle production is a national security interest. It supports factories and workers, keeping them fresh and knowledgeable. It provides great domestic jobs, domestic goods, and export potential. In times of war or other pressing need, these factories can be shifted to other types of production. Countries will ensure that their automotive industries survive. This will not be a single company market. This will not even be a 10 company market. You'll see fifty auto companies competing and producing EVs. Tesla may remain the market leader, but they will not dominate the market.
- _ea1k 4y ago
  > This will not be a single company market. Exactly! Not only that, but "second movers" like Rivian have some advantages too. They don't have to build out their own charge network to support coast to coast travel. They don't have to invent their own charge standard because the industry one was limited to 50KW. That also have lots of intangible benefits. In the early days of Tesla, reviews focused heavily on range and the lack of charging. Rivian reviews have been able to focus more on the vehicle, since people are more accustomed to EVs now. I see far fewer "oh noes, where will a customer charge" stories in the vehicle's reviews. The challenges that are similar are all around scaling the business. Launching a car company is hard. Rivian is exceptionally well capitalized, though.
- KerrAvon 4y ago
  There are two big barriers to large-scale vehicle production that make disruption in the sector very difficult. (1) huge capital investment required at scale — $billions (2) regulation compliance — you have to follow the rules or you can’t sell in the US. You have to follow a different set of rules in Europe. This is expensive and time consuming. The only way you could say that there will be dozens of whole-vehicle EV companies is if one or more of them are producing white label versions of the same vehicle for other companies. The government, if it wanted to, could incentivize electric car production more directly than they have been so far, and with even more dollars. But it’s still going to be an easy business in which to lose vast sums of money. The best case scenario is that VW, Toyota, etc get their shit together on software, whether separately or collectively.
zaroth 4y ago
I’m guessing you’re looking at market cap and not enterprise value when you are comparing Rivian to Ford. Market cap is about supply and demand based on a very limited number of shares changing hands, don’t confuse it with an actual company value. Ford is no more profitable on its EV investment than Rivian. They just have a massive balance sheet to hide the R&D expenditures. The way that Rivian competes is by making a better product. Versus Ford, GM, VW etc. that’s not really asking very much. There’s plenty of room in the market if their product is awesome. Mostly, IMO, that will come down to software expertise.
- dsfyu404ed 4y ago
  >The way that Rivian competes is by making a better product Or they can sell an image like Toyota Jeep, Caddilac, etc. do with certain product lines (that said, all these OEMs have other product lines that compete on merit) and spend all their money on marketing and astroturfing.
bmelton 4y ago
> Where do investors see the growth? It's a really well designed piece of hardware, with actually innovative features that have done a great job separating itself from the existing stalwarts making boring, me-too cars that happen to be electric. If they can manage to bring that innovation down to a sub-$60k offering, they'll be able to pick off sales from cars like the Mustang Mach E that nobody seems to love but is in high demand, presumably due to its low price for those looking for a cheaper way to get away from combustion without spending a fortune. They were also new enough to the market that they were able to draw a lot of excitement from investors before everybody else started competing tho, so your point is definitely fair, and it's probably become more of a gamble than originally anticipated.
- jdmichal 4y ago
  Ford's "boring, me-too cars that happen to be electric" strategy on the F-150 Lightning was absolute genius. The F-150 has been the best-selling truck since 1977, and the best-selling vehicle since 1981. Why would one ever mess with that? GM is taking a different approach on the Silverado EV. Still looks like a normal truck, but it's been designed around the electric powertrain. So we'll see who wins that race. I'm sure I'm not the only person in the world that just wants a normal car or truck, but electric.
  - bmelton 4y ago
    I agree. The F-150 Lightning is perhaps the polar opposite of the Mach-E. It's practical, and has literally dozens of smart choices made that leverage the utility of electric without them feeling remotely like tech demos. If you extend the boring -> practical line out to "exciting," that seems to be where I mentally position the Rivian right now. It does largely feel like a tech demo, but one that is carefully considered, if somewhat less utilitarian.
ryzvonusef 4y ago
> Where do investors see the growth? Some of it might be a gold rush to "capture the next iphone" moment, but you have to understand, if govt are really seriously about banning ICE cars... then not having the weight of MASSIVE legacy systems hanging around your neck might have a value of its own. It's not just about being a cassette manufacturer in the era of CDs, it's the possibility of govt banning cassettes all together.

echelon 4y ago

While I agree that it will be difficult for smaller EV startups to compete against the whole market, this line always stands out to me: > Tesla had first to market advantage There is nothing that makes Tesla a monopoly. At the time the Ford Model T was itself in Tesla's shoes, it used to come in only one color. Competitors quickly filled in for unmet market demand and introduced lots of options. Just like Ford, Tesla will not be able to meet the demands of every consumer, irrespective of their current production capacity. Plenty of industrialized nations have a vested interest in their automotive industries and will do whatever it takes to help them along and grow to be competitive. Vehicle production is a national security interest. It supports factories and workers, keeping them fresh and knowledgeable. It provides great domestic jobs, domestic goods, and export potential. In times of war or other pressing need, these factories can be shifted to other types of production. Countries will ensure that their automotive industries survive. This will not be a single company market. This will not even be a 10 company market. You'll see fifty auto companies competing and producing EVs. Tesla may remain the market leader, but they will not dominate the market.

_ea1k 4y ago
> This will not be a single company market. Exactly! Not only that, but "second movers" like Rivian have some advantages too. They don't have to build out their own charge network to support coast to coast travel. They don't have to invent their own charge standard because the industry one was limited to 50KW. That also have lots of intangible benefits. In the early days of Tesla, reviews focused heavily on range and the lack of charging. Rivian reviews have been able to focus more on the vehicle, since people are more accustomed to EVs now. I see far fewer "oh noes, where will a customer charge" stories in the vehicle's reviews. The challenges that are similar are all around scaling the business. Launching a car company is hard. Rivian is exceptionally well capitalized, though.
KerrAvon 4y ago
There are two big barriers to large-scale vehicle production that make disruption in the sector very difficult. (1) huge capital investment required at scale — $billions (2) regulation compliance — you have to follow the rules or you can’t sell in the US. You have to follow a different set of rules in Europe. This is expensive and time consuming. The only way you could say that there will be dozens of whole-vehicle EV companies is if one or more of them are producing white label versions of the same vehicle for other companies. The government, if it wanted to, could incentivize electric car production more directly than they have been so far, and with even more dollars. But it’s still going to be an easy business in which to lose vast sums of money. The best case scenario is that VW, Toyota, etc get their shit together on software, whether separately or collectively.

zaroth 4y ago

I’m guessing you’re looking at market cap and not enterprise value when you are comparing Rivian to Ford. Market cap is about supply and demand based on a very limited number of shares changing hands, don’t confuse it with an actual company value. Ford is no more profitable on its EV investment than Rivian. They just have a massive balance sheet to hide the R&D expenditures. The way that Rivian competes is by making a better product. Versus Ford, GM, VW etc. that’s not really asking very much. There’s plenty of room in the market if their product is awesome. Mostly, IMO, that will come down to software expertise.

dsfyu404ed 4y ago
>The way that Rivian competes is by making a better product Or they can sell an image like Toyota Jeep, Caddilac, etc. do with certain product lines (that said, all these OEMs have other product lines that compete on merit) and spend all their money on marketing and astroturfing.

bmelton 4y ago

> Where do investors see the growth? It's a really well designed piece of hardware, with actually innovative features that have done a great job separating itself from the existing stalwarts making boring, me-too cars that happen to be electric. If they can manage to bring that innovation down to a sub-$60k offering, they'll be able to pick off sales from cars like the Mustang Mach E that nobody seems to love but is in high demand, presumably due to its low price for those looking for a cheaper way to get away from combustion without spending a fortune. They were also new enough to the market that they were able to draw a lot of excitement from investors before everybody else started competing tho, so your point is definitely fair, and it's probably become more of a gamble than originally anticipated.

jdmichal 4y ago
Ford's "boring, me-too cars that happen to be electric" strategy on the F-150 Lightning was absolute genius. The F-150 has been the best-selling truck since 1977, and the best-selling vehicle since 1981. Why would one ever mess with that? GM is taking a different approach on the Silverado EV. Still looks like a normal truck, but it's been designed around the electric powertrain. So we'll see who wins that race. I'm sure I'm not the only person in the world that just wants a normal car or truck, but electric.
- bmelton 4y ago
  I agree. The F-150 Lightning is perhaps the polar opposite of the Mach-E. It's practical, and has literally dozens of smart choices made that leverage the utility of electric without them feeling remotely like tech demos. If you extend the boring -> practical line out to "exciting," that seems to be where I mentally position the Rivian right now. It does largely feel like a tech demo, but one that is carefully considered, if somewhat less utilitarian.

ryzvonusef 4y ago

> Where do investors see the growth? Some of it might be a gold rush to "capture the next iphone" moment, but you have to understand, if govt are really seriously about banning ICE cars... then not having the weight of MASSIVE legacy systems hanging around your neck might have a value of its own. It's not just about being a cassette manufacturer in the era of CDs, it's the possibility of govt banning cassettes all together.