[HN Gopher] Rivian announces 1B gross loss and 600M revenue [pdf]
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Rivian announces 1B gross loss and 600M revenue [pdf]
Author : giacaglia
Score : 62 points
Date : 2023-02-28 21:27 UTC (1 hours ago)
(HTM) web link (assets.rivian.com)
(TXT) w3m dump (assets.rivian.com)
| mushufasa wrote:
| "We generated negative gross profit of $(1,000) million for the
| fourth quarter 2022. For fiscal year 2022, we generated negative
| gross profit of $(3,123) million. Gross profit for the fourth
| quarter 2022 was impacted by a lower of cost or net realizable
| value ("LCNRV") of inventory charge and losses on firm purchase
| commitments of $920 million as of December 31, 2022 compared to
| $95 million as of December 31, 2021. We expect to continue to
| incur these charges throughout 2023 but anticipate the total
| charge will decline as we drive down cost of goods sold per
| vehicle by lowering material, production, logistics, and other
| costs. We forecast reaching positive gross profit in 2024 and
| therefore expect that by the end of 2024, we will no longer have
| material LCNRV inventory charges and losses on firm purchase
| commitments associated with our Normal facility."
| uptownfunk wrote:
| Are these at all related to supply chain or inflation issues?
| mattlondon wrote:
| "negative gross profit" ... that is corpspeak for "loss" right?
|
| I guess don't say "The L-word" is some attempt to paint a rosy
| picture? "This is not use losing money! We're _making_ a
| negative _profit_ by investing! "
| briga wrote:
| Maybe they're trying to trick the automated trading
| algorithms that buy and sell shares based on sentiment
| analysis. Negative gross profit sounds vaguely like a good
| thing at a glance
| alexb_ wrote:
| No, it means that the column for gross profit is negative.
| Loss is used many times in different columns on the
| consolidated balance sheet.
| RC_ITR wrote:
| You are incorrect. 'Loss' is a perfectly acceptable GAAP
| term for negative profits on the P&L, it's just that 'Gross
| Loss' is so rare, nobody really uses it.
|
| You can even look at the 10-k and see they say 'Net Loss'
| instead of 'Net Income.'
| draw_down wrote:
| [dead]
| RC_ITR wrote:
| >"negative gross profit" ... that is corpspeak for "loss"
| right?
|
| Negative gross profit means they are selling the cars for
| less than it costs to make them, which is like 'mega-loss.'
|
| It's one thing to make $5k per truck, but then spend a lot on
| advertising to get the word out (eventually the word is out
| and you can slow down advertising/spread it across more
| sales).
|
| It's another thing to _lose_ $5k per truck and still have to
| spend money on advertising it.
|
| EDIT: To be fair, this is because Rivian built big/expensive
| factories and still only makes a small amount of cars in
| those factories. A big question will be their ability to
| actually use those factories to their full potential.
| onlyrealcuzzo wrote:
| This is just GAAP, right?
|
| If you know what Gross Profit is - negative Gross Profit is a
| fine concept. Why have a separate line item & term for
| positive and negative?
| RC_ITR wrote:
| If you look on their 10-Q/K's, Rivian refers to 'Net Loss'
| instead of 'Net Income.'
|
| The line items can be changed in that way and it still
| qualifies for GAAP.
| dbg31415 wrote:
| I think these look great, but I can't see them replacing
| combustion engines for all the things people who drive trucks in
| the country need.
|
| Like... I'm not going to load this up with fence posts and go out
| for a 12 hour day... plugging in the fence post digger to the
| battery... I'd be afraid that since I can't just toss in an extra
| gas tank that I'd be walking home.
|
| And I can't see this pulling a horse trailer across the Great
| Plains stopping every 300 miles to recharge for several hours.
| (But I know North Dakota did finally get a Tesla charging
| stating!) Just feels like it's not quite setup for "real" use.
|
| I can totally see some suburban guy using this to go camping.
| But... even that, like I don't want to leave this parked at the
| trail head for a week, when I'm hiking. I bet the battery would
| hold a week, but like what if it didn't? I couldn't just bum a
| jump from another camper.
|
| One of the joys to being out in nature, is being away from "it
| all" -- including being away from the population density required
| to make charging stations viable. I think that's always going to
| be a fundamental flaw with electric "adventure" vehicles.
|
| Cool to look at. Promising tech. But EVs are still "toys" in my
| mind.
| mbgerring wrote:
| The financials may not look good right now, but the vehicles are
| _extremely_ good. They're already way out in front of the EV
| truck segment, and the big automakers have a huge gap to make up
| to reach the same level of quality. I wouldn't be surprised if
| they manage to turn this around and become profitable.
| giobox wrote:
| In isolation, sure, but this space is going to get so fiercely
| competitive so quickly (on the order of years, but that is fast
| for the car industry!) and ASPs for electric trucks will come
| down. Rivian are still generally only selling ~six-figure
| trucks today (the priciest configs ship sooner of course) and
| not making money at it.
|
| How good the vehicle is becomes irrelevant if you can't make it
| at a price people want to pay. I still think Rivian can get
| there, but there is so far to go. They only delivered ~20k cars
| in 2022.
| bink wrote:
| I'm not sure it's fair to say the priciest configs ship
| sooner. They're really only delivering two trucks right now,
| the quad motor, large pack versions of the R1T and R1S. The
| dual motor configs are cheaper but were only introduced
| recently. The max pack versions have been for sale for awhile
| and none of have been delivered, but they're also the most
| expensive.
|
| They did raise prices around 1 year ago but I've seen no
| evidence that they've prioritized orders for those who
| purchased after the price increase or who equipped more
| expensive options (options like tents and racks are shipping
| separately).
| giobox wrote:
| If you can't make money on the highest margin configs (and
| they can't yet), you certainly don't prioritise selling the
| lower margin models. This is a fairly common practice for a
| new model line from an auto-maker and Rivian are no
| different.
|
| The reason I point price out at all, competition is already
| available for less in places (F150 Lightning), and more
| electric trucks are due to launch shortly - not great if
| you can't turn a profit on six figure models let alone
| considering lower priced offerings to compete.
| basch wrote:
| You hear this all the time. There is no such thing as a huge
| lead in automaking. It's an incredibly clonable product, and
| each company has huge teams taking apart each others products.
|
| It's also not really the product that matters. It's service
| centers, parts, repairs, manufacturing capacity. The
| traditional companies have entrenched supply chains to get
| parts, and cars, across the country and into hands. All the new
| companies have to build that from scratch. Producing a couple
| of something great is an achievement, it is not a lead.
|
| It is much much easier to catch up on the product side than it
| is to innovate. And because the actual product is only a
| portion of total value, the companies that are "way ahead" with
| the most futuristic cars are really the ones playing catch up.
| gwbas1c wrote:
| Think of it from the perspective of disruption. Large,
| incumbent businesses get disrupted all the time. A major
| indicator of a David beating a Goliath is when the rules of
| the business change.
|
| And, with EVs, the rules of the business have changed, pretty
| much overnight.
|
| https://en.wikipedia.org/wiki/The_Innovator%27s_Dilemma
|
| IMO: Rivian is ripe for a major investment from an outsider
| with a lot of cash, (like Amazon,) or for acquisition from a
| major automaker. An acquisition will only work if they are
| generally allowed to be independent and run with little
| interference. Given how direct sales without independent
| dealers are major part of the rule changes, it's very hard
| for Rivian to leverage an acquiring company's dealer network.
| cassac wrote:
| I thought that until Tesla wrecked everyone.
| night862 wrote:
| I dunno about that, from the top of my head I recall Daewoo
| to be the last auto make to withdraw from the states at
| least.
|
| Tesla has so far to go to "wreck" anybody who didn't
| already pay for "full self-driving".
| basch wrote:
| Wrecked them how? It's 22Q4 sales numbers are a quarter of
| GM. They currently rank in 9th place in production. It's
| taken them a decade to get a dealer network built. Their
| repairs timeline sound just as horrifying as their
| competitors.
|
| https://www.goodcarbadcar.net/2023-us-auto-sales-figures-
| by-...
| cassac wrote:
| But their owners love them and the kids love them. If you
| adjust the market to be just for what they do, electric
| cars and not all cars, they are indeed wrecking them.
|
| It was a segment the ICE car manufacturers mostly ignored
| and now they have profitable competition where it didn't
| exist before. Maybe not wrecked but definitely lold.
| basch wrote:
| Lightly dented? Like I said, their lead means almost
| nothing.
|
| I don't know what being loved really has to do with
| production. It won't take long for a bunch of companies
| to have equally loved products, and in 30 years, Tesla's
| "lead" will be a footnote. Unless they do, future tense,
| wreck everybody.
|
| It's a weird response to to my claim that everything but
| the product matters just as much, if not more. I'm not at
| all saying Teslas product is or isn't the best at the
| moment.
| chickenpotpie wrote:
| Tesla is a luxury car manufacturer. Of course they have
| less sales. Luxury brands have lower volume and higher
| profit margins. You're comparing Gucci and Levi's.
| amluto wrote:
| Tesla is really nothing special. It has one massive
| advantage: the supercharger network. Other than that, it
| has an excellent powertrain (eminently clonable), a pretty
| good nav system, a pretty good adaptive cruise control, no
| CarPlay or Android Auto, and no interior amenities worth
| mentioning. And they have absolutely terrible parasitic
| power consumption, a property that every other manufacturer
| has nailed for decades, because a car with a single lead-
| acid battery that parasitically discharges like a Tesla
| would be utterly useless. Tesla would like you to think
| they make the world's best batteries, but they really
| don't. They do have mindshare, though, and everyone else
| has been sitting on their butts and failing to compete
| effectively.
| rconti wrote:
| Do other EV makers have better parasitic drain? I'm
| honestly not sure. My Tesla's isn't that bad, but it's
| not 0. Might be a couple miles a day, which isn't a ton
| of miles, but it's a lot of energy.
|
| It also seems they have a pretty significant efficiency
| advantage per kWh. Whenever I see EVs compared, the
| general consensus seems to be Tesla has a lead above
| everyone else.
| rconti wrote:
| It feels to me like the F150 Lightning is closer to a
| Rivian than, say, an electric BMW is to a Tesla, in terms
| of tech.
|
| If I were shopping for a new pickup, it would be hard to
| choose between the Ford and the Rivian because Ford has the
| incumbent automaker advantages while Rivian has the "cool
| startup" advantages. But in passenger cars, Tesla still has
| the Supercharger moat, which the Rivian doesn't enjoy.
| [deleted]
| majormajor wrote:
| Tesla was famously close to failing.
|
| So on one hand, post-Tesla, there's more public readiness
| for EVs.
|
| On the other hand, there's a huge established EV-native
| incumbent PLUS far more legacy brand competition in the
| market.
|
| So it's still a really risky playbook.
| cassac wrote:
| I agree it was risky, and close to failing, but that's
| what usually happens with great things. I don't think any
| other car company that makes electric cars would say they
| aren't playing catch up with Tesla. They seem to
| perpetually be a few years behind.
|
| I was just making my comment based on the parent comment
| saying it couldn't be done. It's done all the time in
| every segment.
|
| Never underestimate the bean counters from ruining the
| incumbents.
| alexb_ wrote:
| "wrecked"... Tesla didn't even come close to wrecking
| anybody. They came in as a new competitor, and are still
| massively overvalued because of investor delusion.
| cassac wrote:
| They may be over valued but everybody is absolutely
| playing catch-up and are quite a bit away from their
| profit margins.
|
| What's even worse for the legacy companies is Tesla is
| the Kleenex/Coke of electric cars to a lot of young
| minds.
| V__ wrote:
| Tesla makes better software right now. But the profit-
| margins argument seems to be a misconception [1]. Until
| Tesla distances itself from Musk, I also don't think the
| brand will stay 'cool' for that long.
|
| [1] https://seekingalpha.com/article/4573601-tesla-gross-
| margins...
| cassac wrote:
| I don't think those are fully like to like comparisons
| though. You have to run those numbers just for electric.
| Nobody I know would cross shop a Tesla and a Rav 4. They
| can have their margins on their ICE catalog but they
| don't have it on their electric yet even with the dealer
| network numbers added in.
| V__ wrote:
| This we can agree on, but just as an example VW will have
| those margins within this year and electric sales are
| about a third of Teslas:
| https://www.reuters.com/business/autos-
| transportation/volksw...
| LanceJones wrote:
| Toyota engineers just acknowledged that their teardown of
| a Model Y "revealed a work of art". Toyota. If my 17,000
| shares make me delusional, so be it, friend.
| night862 wrote:
| Heh, the art world is full of weird bs. My favorite piece
| by Pablo "Tesla" Picasso is this one:
| https://teslamotorsclub.com/tmc/threads/ran-over-
| something-n...
|
| Truly a work of art.
| chickenpotpie wrote:
| I strongly disagree. Companies are having a very very hard
| time getting into the electric vehicle business. Toyota
| actively spent money trying to slow down the advancements in
| EVs to give themselves time to catch up
| (https://electrek.co/2021/09/22/toyota-facing-boycotts-
| over-f...). If only centers, parts, repairs, and
| manufacturing capacity matter, then Toyota should have
| nothing to fear. They have all of that in spades compared to
| rivian or Tesla.
| hedora wrote:
| I really like their cars, but they're not practical
| replacements for a full size pickup truck (as the F-150
| Lightning is).
|
| Anyway, they're competing more with range rover and jeep than
| trucks, which is fine (and also a mostly-unaddressed segment).
| lockhouse wrote:
| Even the F-150 Lightning isn't a good replacement for any
| pickup truck use cases that require towing or going far off
| the beaten path outside the reach of charging stations.
| There's still no EV equivalent of just throwing a couple gas
| cans in the bed to extend the range.
|
| It's good for typical suburban pickup truck uses though and
| could be a good farm truck since you could just charge it at
| home.
| aaomidi wrote:
| Electricity is everywhere. Like. Everywhere. It's only a
| matter of time before the charging network expands.
| lockhouse wrote:
| Electricity assuredly is NOT everywhere. There are large
| swaths of the US where you will be very far from a plug.
| Also, it takes an impractical amount of time to charge an
| EV pickup truck on anything other than a fast charger.
|
| We are not anywhere near where the infrastructure is
| ready for EV pickup trucks to be practical for a large
| number of people that currently need them. We may get
| there some day, but not for decades without a huge
| breakthrough in battery charging technology or manhattan
| project level investment in charging infrastructure.
| PragmaticPulp wrote:
| Likely a smart move.
|
| The F-150 Lightning is also a very good truck, and it gets to
| capitalize on the F-150 brand and customer base.
|
| They addressed a gap in the market (smaller electric truck)
| rather than trying to go head-to-head with the biggest full-
| size truck brand in the industry.
|
| Smart move.
| mbgerring wrote:
| The Rivian is a full-size truck and performs as good or
| better than the Lightning for similar tasks.
| alexb_ wrote:
| What's the price comparison?
| lh7777 wrote:
| Ford has been rapidly raising their prices (so it's hard
| to keep track) but last I saw starting prices were $73k
| for the Rivian and $56k for the Lightning.
| majormajor wrote:
| That bed length disadvantage is pretty significant if
| you're coming to it from the "truck user" market vs the
| "weekend camper" or "soccer mom" market.
|
| I was interested in a Rivian until I saw one in person
| and saw how short that bed was. It wasn't the first spec
| I'd looked at on paper, but jumped out in-person. In that
| size I'd probably go cheap with a Maverick hybrid for now
| until there are more full-EV competitors.
| tstrimple wrote:
| Just looked it up and realized it isn't even close to
| passing the sheet good test. I suppose the expectation is
| to drive with the tailgate down? My minivan seems to be a
| more competent hauler of material (for my admittedly
| limited needs) than the Rivian.
| slaw wrote:
| I wouldn't count on Maverick to be available. All 2023
| Mavericks were ordered in September 2022. I'll probably
| wait until 2025 to get one.
| majormajor wrote:
| I've seen some on dealer lots in the past month. YMMV on
| options/colors of course.
| mbgerring wrote:
| > they're not practical replacements for a full size pickup
| truck (as the F-150 Lightning is).
|
| Why not? I've done "truck stuff" in a Rivian, like towing a 5
| ton car trailer over the Sierra Nevadas. They have the same
| towing capacity and the Rivian has better battery range. They
| also cost the same similarly equipped. What's the issue?
| gwbas1c wrote:
| Probably bed size.
| echelon wrote:
| 100% anecdotal: I'm in Georgia. If I had to guesstimate, I see
| about ~20 Rivians a month now in both urban and suburban
| settings. They seem to be catching on.
| alexb_ wrote:
| 4th quarter consolidated balance sheet (in millions) so you don't
| have to click through and look through it:
|
| > Revenue: 663 > Cost of Revenues: 1,663 > Gross Profit: (1,000)
|
| Operating Expenses (Totals 795):
|
| > R&D: 402 > Selling, general, administrative: 393
|
| Loss from Operations: (1,795)
|
| Interest income: 99
|
| Interest expense: 33
|
| Other net income: 6
|
| Loss before taxes: (1,723)
|
| Remember, all of these are in millions. So Rivian managed to lose
| 1.7 billion dollars in 3 months. That comes out to nearly 19
| million dollars lost every single day.
| legitster wrote:
| I'm still pretty optimistic on Rivian.
|
| Building an auto manufacturer from scratch is pretty up there as
| one of the hardest/most expensive business challenge that exists.
| The fact that they have survived through the "burning money"
| stage to get to the other side at all is pretty powerful.
|
| All the examples of car startups that failed only did so because
| they struggled to drum up sales in their day (DeLorean, Fiskar,
| Tucker, etc). On the other hand, I am seeing Rivians EVERYWHERE.
| They are selling them as fast as they can make them. On top of
| that, they seem to be doing a great job of releasing new models
| pretty quickly and skipping over the years of QC problems that
| plagued early Tesla.
|
| If there's actually consumer demand for the car, and the
| _marginal_ costs to manufacture are favorable - you can probably
| ignore all of the sunk development costs. SOMEONE would want to
| carry on the business. But we will probably see all parties
| involved eating or writing off as much of the debt as possible
| right now that they are transitioning to cash flow.
| DoesntMatter22 wrote:
| Tesla is in big trouble...
| greenthrow wrote:
| The vehicles are so good. I hope they are able to get through
| this and become profitable.
| rootusrootus wrote:
| Financial experts: Do they break it down in a way that shows the
| COGS for each vehicle produced? Has that dropped a significant
| amount from a year ago?
| realworldperson wrote:
| [dead]
| sinistersnare wrote:
| I've never heard of Rivian, but it annoys me seeing an
| environmental message for a car company. There is nothing
| environmentally friendly about private transportation, the engine
| is only a small piece of the story.
|
| > preserving the natural world for generations to come
|
| Invest in public transportation instead.
| gwbas1c wrote:
| Public transportation is a luxury. It assumes that you can live
| in a dense area and that your travel needs coincide with
| bus/train routes.
|
| It's very practical for many, and very impractical for many
| too.
| PaulsWallet wrote:
| I ride the bus and I can promise you I don't do it because of
| luxury. Even if that was true, it would only be true in North
| America. In the rest of the developed world, public transport
| extends out into rural areas.
| luckylion wrote:
| Yeah, if by "extends out" you mean "you can get there,
| eventually". Not if you mean "you can get there in a
| reasonable amount of time and you don't need to time it
| perfectly because you only get two chances a day".
| rootusrootus wrote:
| > the rest of the developed world, public transport extends
| out into rural areas
|
| Are you by chance referring to Europe with this comment? I
| ask because Europe's idea of rural and North America's idea
| are quite different.
| tsudounym wrote:
| Switzerland has villages with only hundreds of people
| that regularly receive train service. There are states
| with similar GDP, size and density as Switzerland that do
| not have any train service. Don't think of the US as a
| whole, think of the individual states who easily have the
| budget equivalent of European countries.
| ghaff wrote:
| >In the rest of the developed world, public transport
| extends out into rural areas.
|
| I have spent a lot of time in Europe and, once you get away
| from population centers and even _larger_ towns, public
| transit can get very hit or miss. OK, maybe there 's
| technically a once or twice a day bus to that rural hamlet
| but lots of Europeans own cars and, while it's generally
| easier to get by without cars in areas of Europe, it's not
| like you can hop on public transportation everywhere.
|
| It varies of course. Somewhere like Switzerland (as another
| poster notes) is generally easier to get off the beaten
| track by bus or train than a lot of coutries.
| tsudounym wrote:
| What a hilariously American comment. Nearly all American
| cities were built by train networks that existed in the
| 1800s. These train lines were ripped out to make way for car
| infrastructure in the mid-1900s, which was designed to
| segregate neighborhoods and give giant profits to GM. Even
| famously car-centric LA with their massive freeways once had
| the best public transit in the world.
|
| https://www.segregationbydesign.com/
| kelnos wrote:
| I don't think we're talking solely about cities here;
| suburban and rural areas can never be sustainably and cost-
| effectively served by public transit, at least not the kind
| of areas with densities you'll find in the US.
|
| Certainly US cities are very weak on the public transit
| front, and there's a lot of improvement that can be made
| there. Even then, though, there are a lot of municipalities
| in the US that technically are considered "cities" but
| don't have enough density to make pervasive public transit
| feasible.
| tsudounym wrote:
| Switzerland has villages with only hundreds of people
| that regularly receive train service. There are states
| with similar GDP, size and density as Switzerland that do
| not have any train service.
|
| Sprawling suburbs are a giant scam - the cost of
| providing urban amenities (power, internet, sewage) to
| these neighborhoods is much higher than it appears. The
| lines of pipes and power lines in sprawling burbs cost
| wayyyy more than it would to maintain a transit oriented
| development full of townhomes and condos.
| majormajor wrote:
| It's a luxury IFF you live right next to a station and need
| to go right next to stations and your trains/busses/whatever
| aren't too crowded.
|
| Otherwise it's a necessity for those for whom private
| transportation is a luxury, and often not a pleasant one.
| Crammed standing into a crowded box, or transferring a couple
| of times to take 2 hours by bus to go somewhere you could get
| to directly in 30min, etc.
|
| "Invest in public transportation" is a hard sell in a country
| where a huge portion of the population is able to afford
| private vehicles and space to park them, because the level of
| investment required to even equal the convenience factor of
| that is very, very, very high.
|
| EDIT: even in Europe you don't have to travel that far
| outside of city centers to find quite a bit of private car
| ownership. All those European car companies aren't just doing
| it for shits and giggles, after all.
| explaininjs wrote:
| It'd be far worse to have scheduled bus routes and train tracks
| cutting across the vast wilderness than the occasional electric
| vehicle cruising through.
| virgildotcodes wrote:
| Huh, as opposed to the roads and highways cutting across the
| vast wilderness that we have now?
| explaininjs wrote:
| Not really sure what (if any) claim you're making here. I'm
| defining wilderness above to be "those areas without
| sufficient road infrastructure to support heavy vehicles
| like busses", if that helps clarify.
| eppp wrote:
| Depends on how much energy the train uses. I would guess that
| the maintenance and supporting infrastructure for the
| 'occasional' car would dwarf the cost of a railway.
| rootusrootus wrote:
| It would be difficult to eliminate the road, however, so
| that infrastructure is going to exist either way.
| tsudounym wrote:
| A double track train line can move orders of magnitude more
| people than a 30-lane highway can. Cars and highways are
| space inefficient, and highways cause property values
| surrounding it to decrease due to the pollution and noise.
| kelnos wrote:
| You're not really responding to what the parent poster
| said. We're not talking about 30-lane highways, we're
| talking about a small one-lane road that only needs to
| serve tens of people per day. A train route for that is
| absurd.
| tsudounym wrote:
| Because of the space inefficiency of cars, you end up
| building and widening way too may roads, destroying the
| countryside. Trains allow you keep development contained
| without spoiling the countryside. Forgot where I saw
| this, but a Swiss women used to see lines of trucks in
| her village until the government heavily promoted
| electrified freight rail. Now there's little to no trucks
| in her village.
| explaininjs wrote:
| Basically anywhere in Europe (Switzerland especially) is
| incomparable to the "vast wilderness" I described above.
| I speak of roads where a "busy day" is more than (say) 3
| light vehicles traveling.
| cypress66 wrote:
| You will eat the bugs.
|
| It's the only environmentally friendly option.
| Swenrekcah wrote:
| I don't particularly disagree but that's for governments (local
| or larger) to do.
|
| Car companies are obviously going to produce cars, and the
| cleaner they can do it the better.
| seedless-sensat wrote:
| One of their biggest plays are EV delivery trucks (and I see
| them on my streets). I'm sure someone will chime in about the
| environmental concerns of Amazon - but Rivan's strategy seems
| like a decent environmental message to me.
| abfan1127 wrote:
| you clearly don't live in suburban or rural areas. I've tried
| to take public transportation in Phoenix. They put stops every
| 1/4 mi. it takes longer to ride a bus than ride a bike. public
| transit is just not remotely reasonable.
| pedalpete wrote:
| It isn't an either or scenario, and you're providing an
| unrealistic expectation.
|
| Rivian is making "lifestyle vehicles", pick-ups and SUVs that
| are off-road capable, but are not not work trucks. There is no
| public transit out in much of these areas.
|
| They also make Amazon delivery vehicles, so you can't expect
| Amazon deliveries to be made via public transport.
| xnx wrote:
| In the US, total cost per passenger mile for public
| transportation is higher than private vehicles. All that extra
| cost has environmental impact in the form of extra steel,
| concrete, and salaries.
| [deleted]
| mbgerring wrote:
| The entire vehicle fleet needs to be electrified, period. There
| are areas of the United States where a private 4WD vehicle are
| a necessity to get to and from home. The only way to eventually
| retire the vast infrastructure required to deliver fossil fuels
| to rural areas, and everywhere else, is to electrify the entire
| fleet.
|
| Climate change is a chemistry and engineering problem. You can
| solve some of the chemistry and engineering problem upstream,
| through social and cultural changes, but insisting that those
| changes are the _only way to solve the problem_ is flat-out
| false, and absolutely repellent to many people that,
| ultimately, will need to be brought along in the transition
| away from fossil fuels.
|
| Nothing is stopping you from working on the myriad issues that
| prevent greater adoption of public transportation, and you and
| the world would be better served by getting to work building
| the future you want instead of trashing the efforts of people
| working the problem from a different angle.
| kerpotgh wrote:
| [dead]
| shagie wrote:
| Delivery vans are environment saving.
|
| The carbon footprint for delivery is less than going to the
| store. https://sustainability.uw.edu/news/grocery-delivery-
| service-... and
| https://www.washington.edu/news/2013/04/29/grocery-delivery-...
|
| https://ctl.mit.edu/sites/ctl.mit.edu/files/library/public/D...
| looks at the total carbon footprint which takes into account
| packaging too.
|
| For buying something from Amazon, the largest part of the
| carbon footprint is the cardboard boxes and overall, its still
| more efficient than traditional shopping.
| kelnos wrote:
| I agree with you that investment in public transit is
| preferable to private vehicles in many cases, but the primary
| purpose of a pickup truck is not personal transportation, it's
| hauling a bunch of bulky, heavy stuff that isn't feasible to
| bring on public transit.
|
| Regardless, public transit cannot go everywhere. Rural and
| light-density suburban areas can never be adequately and cost-
| effectively served by public transit. Sure, you can run trains
| or buses into areas like those, but either you'll have
| excessively low per-route ridership and unsustainably-high
| operational costs, or you'll have routes that require people to
| travel several miles in order to get to a station/stop, which
| means people need private vehicles anyway.
|
| In these cases, you often end up with an overall trip that
| takes several multiples of the time it would take to drive your
| own private car. I get that many people might find it
| acceptable to impose that kind of situation on people (in the
| name of the environment or whatever reason), but I wouldn't
| want to live in that world. I use public transit whenever
| feasible, and only drive when I have to, but there are limits
| to what I will accept.
| itsmemattchung wrote:
| How does this company -- or any company, for that matter --
| continue operating in the long term with that much significant
| (i.e. 1B) gross loss?
| echelon wrote:
| The goal is to widen the cash flow and capture as much income
| as possible.
|
| Sometimes this succeeds wildly: Amazon.
|
| Sometimes the vision fails to materialize: Uber.
|
| Sometimes the vision was fatally flawed from the start:
| Carvana, MoviePass, ...
| bdcravens wrote:
| The ratios are different, but Uber lost over $2B last year, and
| overall, has lost $9B.
|
| Tesla didn't turn a profit for 8 years, until 2020, and from
| 2016-2018, regularly had 12 trailing months of $1B losses or
| more.
| cj wrote:
| Worth mentioning the thing that likely motivated TSLA to be
| profitable is that it's a requirement to be considered for
| inclusion in the S&P 500 index.
| martythemaniak wrote:
| You raise money, you spend that money to make a factory, then
| you sell whatever the factory makes for a profit, then you pay
| back your investors.
| tfehring wrote:
| The gross loss is driven by $920M in losses on firm purchase
| commitments. As I understand it, Rivian has entered into
| contracts with suppliers to buy some components needed to
| manufacture its vehicles at fixed prices over some future
| period of time, likely several years. If the market prices of
| those components decrease, the value of those contracts also
| decreases. In some sense this isn't a "real" loss - Rivian will
| still be buying the same components, at the same prices, on the
| same dates that it expected to at the start of the quarter. But
| the market prices of the components went down, which creates a
| paper loss, which they have to mark to market.
|
| That also creates a timing mismatch - Rivian's revenue in Q4
| was $663M and its cost of revenue was $1663M, but most of the
| $1663M is associated with vehicles that they haven't delivered
| or even manufactured yet, so they'll recognize that revenue in
| future quarters. I don't know what it actually costs them to
| manufacture one vehicle, but I bet it's a lot less than 2.5x
| the revenue they get from that vehicle.
|
| Leaving aside the accounting and addressing your real question:
| From a quick search it looks like Rivian has raised a total of
| $23B of capital between VC rounds and its IPO, and it has $13B
| of current assets (mostly cash + inventory) as of 12/31, so
| that gives it a fairly long runway even at its current burn
| rate. But its burn rate - loosely, revenue minus expenses - is
| expected to slow over time, assuming that (1) its revenue grows
| faster than expenses (it's expecting deliveries to ~double this
| year, which should increase revenue at a similar rate) and (2)
| its unit economics work out, i.e., its "true" cost of revenue
| is less than its revenue.
| tpmx wrote:
| If there's belief in the company/product they will get more
| investments. If not they'll eventually run out of money.
| serial_dev wrote:
| Tesla's market cap is approximately 644,59 billion USD now.
| Apparently, trying to reproduce that success is worth a couple
| of billions to some people.
| alexb_ wrote:
| In the land of cheap debt and endless promises, you can
| continue running a completely irrational business for a very
| long time. Just look at Uber, who has never turned a profit.
|
| It gets especially bad when you are a new electric car company
| presenting yourself as a tech company so that you can get tech-
| company like speculators throwing money at things that make no
| logical sense whatsoever.
| bonzini wrote:
| Twitter did turn a profit in 2018 and 2019.
| alexb_ wrote:
| Corrected, thank you
| gwbas1c wrote:
| The point of taking investment is to use it to grow the
| business faster than it can grow organically.
|
| (It's pretty much impossible to start a car company without
| outside investment. Just look at its factory.)
|
| They will probably run at a loss until they can figure out how
| to lower their costs, and then make more volume. Pretty typical
| stuff, really.
|
| I also suspect they will need outside investment. Given their
| relationship with Amazon, I could see Amazon supporting them
| until they're profitable.
| fnordpiglet wrote:
| "We make the Amazon delivery vehicles that Amazon gets at cost so
| we are a cost center that manages to offset our expenses by $600M
| further optimizing the weighted cost per delivery vehicle for
| Amazon."
| tomcam wrote:
| Can you translate that for me?
| post_break wrote:
| They sell the delivery trucks at cost, we're going to try to
| make that cost lower so we won't lose money on each one sold.
| juice_bus wrote:
| Is "cost" set at the original date of the agreement?
| Otherwise lowering cost wouldn't help. (or this is a joke
| I'm whiffing on...)
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