Rivian Struggles: Scale Too Small for Ambitious Autonomy Plans
Vertically integrating with <50,000 units of demand is the biggest mistake $Rivian Automotive, Inc.(RIVN)$ can make.
They're operating like $Apple(AAPL)$ in 2010 when the A4 chip launched. But Apple was selling 47 million iPhones/year by then.
Rivian's autonomy day would have been impressive in 2022.
Today, it's the wrong business model (vertically integrated) in a competitive market with modular suppliers offering a scalable solution to competitors with manufacturing scale.
Rivian is STILL only making ~50k vehicles per year. It won't get over 215k in production for AT LEAST another three years.
By then, millions of vehicles will have L4 autonomy. It's too late!
Business. Models. Matter.
Hasn't $Tesla Motors(TSLA)$ FSD proven that most people won't pay for autonomy features? Adoption is ~12% for FSD
At 12% adoption, Rivian would add 26,000 vehicles/yr to Autonomy+, or $15.5 million in revenue AFTER R2 launches in Normal. So, maybe 2027?
To generate this revenue, Rivian designed a custom chip, redisigned the vehicle, and built/trained the software.
This has always been Rivian's problem. They have a strategy and operating expenses like they're a company at scale. But then you look down and they've sold 46,685 vehicles in the past year.
Business. Models. Matter.
For SG users only, Welcome to open a CBA today and enjoy access to a trading limit of up to SGD 20,000 with unlimited trading on SG, HK, and US stocks, as well as ETFs.
🎉Cash Boost Account Now Supports 35,000+ Stocks & ETFs – Greater Flexibility Now
Find out more here.
Complete your first Cash Boost Account trade with a trade amount of ≥ SGD1000* to get SGD 688 stock vouchers*! The trade can be executed using any payment type available under the Cash Boost Account: Cash, CPF, SRS, or CDP.
Other helpful links:
💰Join the TB Contra Telegram Group to Get $10 Trading Vouchers Now🎉
How to open a CBA. How to link your CDP account. Other FAQs on CBA. Cash Boost Account Website.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
