[HN Gopher] Rivian Loses $33K on Every Truck It Sells: Report
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Rivian Loses $33K on Every Truck It Sells: Report
Author : ourmandave
Score : 22 points
Date : 2023-10-04 19:52 UTC (3 hours ago)
(HTM) web link (jalopnik.com)
(TXT) w3m dump (jalopnik.com)
| pengaru wrote:
| It's expensive to build out mass production capacity. This is a
| stupid calculation to do before they're realizing the benefits of
| mass production with lots of vehicles to amortize the costs.
| esafak wrote:
| Why are they doing this? To make money on service fees and the
| next vehicle?
| AlotOfReading wrote:
| Automotive pricing is complicated. The cost probably _was_
| predicted to be profitable at some point, but costs change over
| time and changing cost targets is difficult. Here 's some
| random speculation:
|
| * The amount a vehicle costs to produce decreases dramatically
| depending on how many you're producing because of economies of
| scale, vendors charging less, and higher negotiating power in
| volume. They're currently not producing at the scale they
| expected, so their production costs are inherently higher.
|
| * It's extremely difficult to know where you _can_ cut costs in
| ways that won 't affect customers significantly at design time.
| If you're a new startup in a competitive market, a bad
| reputation is a death sentence. It might be worth starting out
| conservatively and cutting those costs when you have better
| data.
|
| * They went through production/design in one of the worst
| supplier markets in decades. Production costs might have
| increased due to last minute part changes, now they need to
| claw that back down again.
|
| Etc.
| ZeroGravitas wrote:
| Cost Accounting can be a bit of a dark art. It's pretty tricky
| to apportion part of the cost of a factory to every different
| widget made in it.
|
| But in this case, it's likely just BS. They're probably just
| taking the yearly loss and dividing it by the number produced.
| Which is different from each marginal car produced costing them
| 30K.
|
| edit to add: the article claims the main reason for them losing
| so much money is lack of throughput, which demonstrates that
| the claim is bullshit. If they made even more cars and "lost
| 30K" on each one they'd be worse off.
| Paul-Craft wrote:
| > edit to add: the article claims the main reason for them
| losing so much money is lack of throughput, which
| demonstrates that the claim is bullshit. If they made even
| more cars and "lost 30K" on each one they'd be worse off.
|
| Hah! I _knew_ I wasn 't the only one who noticed that. It's
| like the old joke:
|
| > Q: How do you expect to stay in business if you lose money
| on every sale?
|
| > A: Easy. We'll make it up on volume!
|
| More seriously, a production line has huge fixed costs
| associated with it, so you really need to get the most
| throughput out of it that you can, in order to maximize
| profits.
| KeplerBoy wrote:
| Not selling any vehicles would cost them even more. They spent
| a lot of money developing cars and if you only sell a few,
| you're going to make a loss.
| pfannkuchen wrote:
| I assume the plan is to become more efficient over time to the
| point of being profitable. This is a very common pattern even
| in software. Basically they are dumping product using VC money.
| xrd wrote:
| Wow. And not the cheapest vehicles to start off either. That's a
| scary proposition to consider if you buy one of those right now.
| umeshunni wrote:
| Reminder that this is obligatory clickbait from Jalopnik:
|
| https://jalopnik.com/tesla-loses-a-lot-of-money-selling-cars...
|
| Also, as a general rule, don't read financial information from
| bloggers.
| nebula8804 wrote:
| If we are starting to see this junk in the news you think there
| might be a growing short position on the company?
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(page generated 2023-10-04 23:02 UTC)