On Dec. 16, high-end electrical pickup and SUV maker Rivian Automotive (NASDAQ:RIVN) reported its first-ever quarterly outcomes since going public by way of its current IPO. The corporate delivered 11 electrical autos (EVs) in whole through the third quarter of 2021, bringing in roughly $1 million in income. In the meantime, its market capitalization (market cap) was a princely $100 billion on the time of the quarterly launch. General, the corporate seems loads like Tesla (NASDAQ:TSLA) shortly after it went public, however there are some key variations sounding a be aware of warning.
Picture supply: Rivian.
Rivian is a mirror of Tesla in some methods
As soon as buyers bought a take a look at Rivian’s Q3 earnings report, its share price dropped sharply, bringing its market cap down from $100 billion to a pre-Christmas stage of $88 billion. Some analysts have been taking a look at Rivian’s present place and arguing that it is fairly much like Tesla’s initially of its personal upward climb. That was when Elon Musk’s firm additionally had scant income and little quite a lot of automobile fashions and projections of future manufacturing to offer it inventory market traction.
In line with Rivian administration’s letter to shareholders, the corporate earned simply $1 million in income through the three months ending on Sept. 30. Its internet loss for the interval was $1.23 billion, although $458 million of this was a internet loss on account of convertible notes. This led to a $12.21 internet loss per share, far worse than Wall Avenue analyst consensus predictions of a $6.68 loss per share. Omitting the convertible notes, the corporate’s quarterly internet loss was $776 million.
Whereas present manufacturing is simply a handful of autos, Rivian is trying to the long run as a trigger for optimism. It ended the quarter with $5.2 billion in money; along with the online proceeds from its $13.7 billion in gross IPO proceeds and different, smaller funding sources, says it has round $19.9 billion to work with in attaining its objectives. These objectives embrace boosting its Illinois manufacturing unit’s manufacturing capability from 150,000 to 200,000 autos yearly, together with constructing a second manufacturing unit in Georgia with a 400,000-vehicle manufacturing capability, to start working in 2024.
These metrics and objectives seem engaging, however at this level, they’re principally hypothesis. Rivian has 71,000 pre-orders for its R1T pickup truck, nevertheless it solely has a tiny handful of autos truly on the street. Going from producing 11 autos in 1 / 4 to, theoretically, 150,000 per quarter (primarily based on Rivian’s manufacturing unit estimates) in simply three years is a steep problem even with round $20 billion accessible to fund it. Whereas the sum is sort of two-thirds of the quantity automotive large Ford (NYSE:F) is spending by itself EV manufacturing, the Blue Oval has been a longtime automaker for over a century, giving it deep ranges of data on mass manufacturing and immense sources of equipment, technical employees, and title recognition amongst shoppers across the globe.
Rivian may additionally have misplaced Ford’s technical help after the latter determined to “go it alone” on its EV program in November, canceling its joint EV manufacturing plans with Rivian. One other critical roadblock Rivian should overcome is the very completely different setting it faces as an EV start-up in comparison with Tesla a decade in the past.
The place Rivian’s street forks away from Tesla’s
Whereas Rivian’s present metrics look quite like Tesla’s early days apart from its huge valuation, it is not working in the identical setting. Although hybrid autos existed nicely earlier than it, and EVs had been tried, Tesla was a groundbreaking enterprise, the primary of its sort.
Rivian is working in a really completely different world. Tesla itself is now a dominating pressure with a market cap above $1 trillion, manufacturing round 1,000,000 very fashionable EVs per yr. Ford not too long ago stopped accepting reservations for its upcoming F-150 Lightning electrical pickup at 200,000 vehicles as a result of manufacturing could not sustain with demand. It is also constructing $30 billion price of EV and EV battery services by 2025 for a large manufacturing growth.
Chinese language EV producer Nio (NYSE:NIO) simply unveiled a mid-sized electrical sedan, the ET5, able to difficult the Tesla Mannequin S Plaid on vary and options, and it plans to broaden into 25 international locations over the subsequent few years. It is also now persistently constructing greater than 10,000 autos per thirty days. Nearly each main automaker on the earth is within the means of rolling out electrical autos, and there are numerous different devoted EV start-ups to take care of, too.
Briefly, whereas Rivian resembles early Tesla, Tesla was working with close-to-zero critical competitors, giving it far more leeway as a pioneer. Rivian, in contrast, is making an attempt to interrupt into an EV market already crowded with profitable rivals, who’re busy increasing manufacturing into the a whole bunch of 1000’s after which thousands and thousands, whereas Rivian continues to be making an attempt to get its first few autos bought.
On the plus facet, Rivian does at the very least produce working autos and has preorders for 71,000 R1T pickup trucks. Retail titan Amazon (NASDAQ:AMZN) is working with it to purchase a possible 100,000 supply vans. Truly producing these autos could possibly be an issue, nonetheless, contemplating that Ford could now not be a producing accomplice. In a current CNBC interview, Ford CEO Jim Farley stated Ford is contemplating selling its 12% stake in Rivian as soon as lock-up expires, gaining billions it could possibly return to shareholders or put money into its personal quickly accelerating EV push.
Purchase Rivian now, or await a decrease entry level?
Orders and sheer market enthusiasm for all EV shares are arguably the 2 most important elements holding Rivian’s share worth comparatively excessive proper now. However, in my view, the hurdles and dangers it faces in sustaining or rising this valuation are fairly excessive. The challenges of ramping up manufacturing (presumably with out Ford’s know-how and help), the quite a few highly effective rivals it faces, and the probability Ford will promote its Rivian stake, make me skeptical it should preserve its present inventory worth for much longer.
Rivian could turn out to be a viable electric car stock long-term, nevertheless it appears prone to shed a variety of its present hovering valuation within the meantime. This situation makes ready for a a lot decrease share worth as an entry level a method at the very least price contemplating.
This text represents the opinion of the author, who could disagree with the “official” advice place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even one in every of our personal — helps us all assume critically about investing and make choices that assist us turn out to be smarter, happier, and richer.
-- to www.fool.com ","author":{"@type":"Person","name":"EVdoesit","url":"https://www.onlineev.com/author/evdoesit/","sameAs":["https://www.onlineev.com","onlineev.com"]},"articleSection":["Tesla"],"image":{"@type":"ImageObject","url":"https://www.onlineev.com/wp-content/uploads/2021/12/two-rivian-r1t-pickups-scaled.jpg","width":2560,"height":1707},"publisher":{"@type":"Organization","name":"","url":"https://www.onlineev.com","logo":{"@type":"ImageObject","url":""},"sameAs":["https://twitter.com/onlineev"]}}
On Dec. 16, high-end electrical pickup and SUV maker Rivian Automotive (NASDAQ:RIVN) reported its first-ever quarterly outcomes since going public by way of its current IPO. The corporate delivered 11 electrical autos (EVs) in whole through the third quarter of 2021, bringing in roughly $1 million in income. In the meantime, its market capitalization (market cap) was a princely $100 billion on the time of the quarterly launch. General, the corporate seems loads like Tesla (NASDAQ:TSLA) shortly after it went public, however there are some key variations sounding a be aware of warning.
Picture supply: Rivian.
Rivian is a mirror of Tesla in some methods
As soon as buyers bought a take a look at Rivian’s Q3 earnings report, its share price dropped sharply, bringing its market cap down from $100 billion to a pre-Christmas stage of $88 billion. Some analysts have been taking a look at Rivian’s present place and arguing that it is fairly much like Tesla’s initially of its personal upward climb. That was when Elon Musk’s firm additionally had scant income and little quite a lot of automobile fashions and projections of future manufacturing to offer it inventory market traction.
In line with Rivian administration’s letter to shareholders, the corporate earned simply $1 million in income through the three months ending on Sept. 30. Its internet loss for the interval was $1.23 billion, although $458 million of this was a internet loss on account of convertible notes. This led to a $12.21 internet loss per share, far worse than Wall Avenue analyst consensus predictions of a $6.68 loss per share. Omitting the convertible notes, the corporate’s quarterly internet loss was $776 million.
Whereas present manufacturing is simply a handful of autos, Rivian is trying to the long run as a trigger for optimism. It ended the quarter with $5.2 billion in money; along with the online proceeds from its $13.7 billion in gross IPO proceeds and different, smaller funding sources, says it has round $19.9 billion to work with in attaining its objectives. These objectives embrace boosting its Illinois manufacturing unit’s manufacturing capability from 150,000 to 200,000 autos yearly, together with constructing a second manufacturing unit in Georgia with a 400,000-vehicle manufacturing capability, to start working in 2024.
These metrics and objectives seem engaging, however at this level, they’re principally hypothesis. Rivian has 71,000 pre-orders for its R1T pickup truck, nevertheless it solely has a tiny handful of autos truly on the street. Going from producing 11 autos in 1 / 4 to, theoretically, 150,000 per quarter (primarily based on Rivian’s manufacturing unit estimates) in simply three years is a steep problem even with round $20 billion accessible to fund it. Whereas the sum is sort of two-thirds of the quantity automotive large Ford (NYSE:F) is spending by itself EV manufacturing, the Blue Oval has been a longtime automaker for over a century, giving it deep ranges of data on mass manufacturing and immense sources of equipment, technical employees, and title recognition amongst shoppers across the globe.
Rivian may additionally have misplaced Ford’s technical help after the latter determined to “go it alone” on its EV program in November, canceling its joint EV manufacturing plans with Rivian. One other critical roadblock Rivian should overcome is the very completely different setting it faces as an EV start-up in comparison with Tesla a decade in the past.
The place Rivian’s street forks away from Tesla’s
Whereas Rivian’s present metrics look quite like Tesla’s early days apart from its huge valuation, it is not working in the identical setting. Although hybrid autos existed nicely earlier than it, and EVs had been tried, Tesla was a groundbreaking enterprise, the primary of its sort.
Rivian is working in a really completely different world. Tesla itself is now a dominating pressure with a market cap above $1 trillion, manufacturing round 1,000,000 very fashionable EVs per yr. Ford not too long ago stopped accepting reservations for its upcoming F-150 Lightning electrical pickup at 200,000 vehicles as a result of manufacturing could not sustain with demand. It is also constructing $30 billion price of EV and EV battery services by 2025 for a large manufacturing growth.
Chinese language EV producer Nio (NYSE:NIO) simply unveiled a mid-sized electrical sedan, the ET5, able to difficult the Tesla Mannequin S Plaid on vary and options, and it plans to broaden into 25 international locations over the subsequent few years. It is also now persistently constructing greater than 10,000 autos per thirty days. Nearly each main automaker on the earth is within the means of rolling out electrical autos, and there are numerous different devoted EV start-ups to take care of, too.
Briefly, whereas Rivian resembles early Tesla, Tesla was working with close-to-zero critical competitors, giving it far more leeway as a pioneer. Rivian, in contrast, is making an attempt to interrupt into an EV market already crowded with profitable rivals, who’re busy increasing manufacturing into the a whole bunch of 1000’s after which thousands and thousands, whereas Rivian continues to be making an attempt to get its first few autos bought.
On the plus facet, Rivian does at the very least produce working autos and has preorders for 71,000 R1T pickup trucks. Retail titan Amazon (NASDAQ:AMZN) is working with it to purchase a possible 100,000 supply vans. Truly producing these autos could possibly be an issue, nonetheless, contemplating that Ford could now not be a producing accomplice. In a current CNBC interview, Ford CEO Jim Farley stated Ford is contemplating selling its 12% stake in Rivian as soon as lock-up expires, gaining billions it could possibly return to shareholders or put money into its personal quickly accelerating EV push.
Purchase Rivian now, or await a decrease entry level?
Orders and sheer market enthusiasm for all EV shares are arguably the 2 most important elements holding Rivian’s share worth comparatively excessive proper now. However, in my view, the hurdles and dangers it faces in sustaining or rising this valuation are fairly excessive. The challenges of ramping up manufacturing (presumably with out Ford’s know-how and help), the quite a few highly effective rivals it faces, and the probability Ford will promote its Rivian stake, make me skeptical it should preserve its present inventory worth for much longer.
Rivian could turn out to be a viable electric car stock long-term, nevertheless it appears prone to shed a variety of its present hovering valuation within the meantime. This situation makes ready for a a lot decrease share worth as an entry level a method at the very least price contemplating.
This text represents the opinion of the author, who could disagree with the “official” advice place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even one in every of our personal — helps us all assume critically about investing and make choices that assist us turn out to be smarter, happier, and richer.
-- to www.fool.com ","author":{"@type":"Person","name":"EVdoesit","url":"https://www.onlineev.com/author/evdoesit/","sameAs":["https://www.onlineev.com","onlineev.com"]},"articleSection":["Tesla"],"image":{"@type":"ImageObject","url":"https://www.onlineev.com/wp-content/uploads/2021/12/two-rivian-r1t-pickups-scaled.jpg","width":2560,"height":1707},"publisher":{"@type":"Organization","name":"","url":"https://www.onlineev.com","logo":{"@type":"ImageObject","url":""},"sameAs":["https://twitter.com/onlineev"]}}
On Dec. 16, high-end electrical pickup and SUV maker Rivian Automotive (NASDAQ:RIVN) reported its first-ever quarterly outcomes since going public by way of its current IPO. The corporate delivered 11 electrical autos (EVs) in whole through the third quarter of 2021, bringing in roughly $1 million in income. In the meantime, its market capitalization (market cap) was a princely $100 billion on the time of the quarterly launch. General, the corporate seems loads like Tesla (NASDAQ:TSLA) shortly after it went public, however there are some key variations sounding a be aware of warning.
Picture supply: Rivian.
Rivian is a mirror of Tesla in some methods
As soon as buyers bought a take a look at Rivian’s Q3 earnings report, its share price dropped sharply, bringing its market cap down from $100 billion to a pre-Christmas stage of $88 billion. Some analysts have been taking a look at Rivian’s present place and arguing that it is fairly much like Tesla’s initially of its personal upward climb. That was when Elon Musk’s firm additionally had scant income and little quite a lot of automobile fashions and projections of future manufacturing to offer it inventory market traction.
In line with Rivian administration’s letter to shareholders, the corporate earned simply $1 million in income through the three months ending on Sept. 30. Its internet loss for the interval was $1.23 billion, although $458 million of this was a internet loss on account of convertible notes. This led to a $12.21 internet loss per share, far worse than Wall Avenue analyst consensus predictions of a $6.68 loss per share. Omitting the convertible notes, the corporate’s quarterly internet loss was $776 million.
Whereas present manufacturing is simply a handful of autos, Rivian is trying to the long run as a trigger for optimism. It ended the quarter with $5.2 billion in money; along with the online proceeds from its $13.7 billion in gross IPO proceeds and different, smaller funding sources, says it has round $19.9 billion to work with in attaining its objectives. These objectives embrace boosting its Illinois manufacturing unit’s manufacturing capability from 150,000 to 200,000 autos yearly, together with constructing a second manufacturing unit in Georgia with a 400,000-vehicle manufacturing capability, to start working in 2024.
These metrics and objectives seem engaging, however at this level, they’re principally hypothesis. Rivian has 71,000 pre-orders for its R1T pickup truck, nevertheless it solely has a tiny handful of autos truly on the street. Going from producing 11 autos in 1 / 4 to, theoretically, 150,000 per quarter (primarily based on Rivian’s manufacturing unit estimates) in simply three years is a steep problem even with round $20 billion accessible to fund it. Whereas the sum is sort of two-thirds of the quantity automotive large Ford (NYSE:F) is spending by itself EV manufacturing, the Blue Oval has been a longtime automaker for over a century, giving it deep ranges of data on mass manufacturing and immense sources of equipment, technical employees, and title recognition amongst shoppers across the globe.
Rivian may additionally have misplaced Ford’s technical help after the latter determined to “go it alone” on its EV program in November, canceling its joint EV manufacturing plans with Rivian. One other critical roadblock Rivian should overcome is the very completely different setting it faces as an EV start-up in comparison with Tesla a decade in the past.
The place Rivian’s street forks away from Tesla’s
Whereas Rivian’s present metrics look quite like Tesla’s early days apart from its huge valuation, it is not working in the identical setting. Although hybrid autos existed nicely earlier than it, and EVs had been tried, Tesla was a groundbreaking enterprise, the primary of its sort.
Rivian is working in a really completely different world. Tesla itself is now a dominating pressure with a market cap above $1 trillion, manufacturing round 1,000,000 very fashionable EVs per yr. Ford not too long ago stopped accepting reservations for its upcoming F-150 Lightning electrical pickup at 200,000 vehicles as a result of manufacturing could not sustain with demand. It is also constructing $30 billion price of EV and EV battery services by 2025 for a large manufacturing growth.
Chinese language EV producer Nio (NYSE:NIO) simply unveiled a mid-sized electrical sedan, the ET5, able to difficult the Tesla Mannequin S Plaid on vary and options, and it plans to broaden into 25 international locations over the subsequent few years. It is also now persistently constructing greater than 10,000 autos per thirty days. Nearly each main automaker on the earth is within the means of rolling out electrical autos, and there are numerous different devoted EV start-ups to take care of, too.
Briefly, whereas Rivian resembles early Tesla, Tesla was working with close-to-zero critical competitors, giving it far more leeway as a pioneer. Rivian, in contrast, is making an attempt to interrupt into an EV market already crowded with profitable rivals, who’re busy increasing manufacturing into the a whole bunch of 1000’s after which thousands and thousands, whereas Rivian continues to be making an attempt to get its first few autos bought.
On the plus facet, Rivian does at the very least produce working autos and has preorders for 71,000 R1T pickup trucks. Retail titan Amazon (NASDAQ:AMZN) is working with it to purchase a possible 100,000 supply vans. Truly producing these autos could possibly be an issue, nonetheless, contemplating that Ford could now not be a producing accomplice. In a current CNBC interview, Ford CEO Jim Farley stated Ford is contemplating selling its 12% stake in Rivian as soon as lock-up expires, gaining billions it could possibly return to shareholders or put money into its personal quickly accelerating EV push.
Purchase Rivian now, or await a decrease entry level?
Orders and sheer market enthusiasm for all EV shares are arguably the 2 most important elements holding Rivian’s share worth comparatively excessive proper now. However, in my view, the hurdles and dangers it faces in sustaining or rising this valuation are fairly excessive. The challenges of ramping up manufacturing (presumably with out Ford’s know-how and help), the quite a few highly effective rivals it faces, and the probability Ford will promote its Rivian stake, make me skeptical it should preserve its present inventory worth for much longer.
Rivian could turn out to be a viable electric car stock long-term, nevertheless it appears prone to shed a variety of its present hovering valuation within the meantime. This situation makes ready for a a lot decrease share worth as an entry level a method at the very least price contemplating.
This text represents the opinion of the author, who could disagree with the “official” advice place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even one in every of our personal — helps us all assume critically about investing and make choices that assist us turn out to be smarter, happier, and richer.
-- to www.fool.com ","author":{"@type":"Person","name":"EVdoesit","url":"https://www.onlineev.com/author/evdoesit/","sameAs":["https://www.onlineev.com","onlineev.com"]},"articleSection":["Tesla"],"image":{"@type":"ImageObject","url":"https://www.onlineev.com/wp-content/uploads/2021/12/two-rivian-r1t-pickups-scaled.jpg","width":2560,"height":1707},"publisher":{"@type":"Organization","name":"","url":"https://www.onlineev.com","logo":{"@type":"ImageObject","url":""},"sameAs":["https://twitter.com/onlineev"]}}
On Dec. 16, high-end electrical pickup and SUV maker Rivian Automotive (NASDAQ:RIVN) reported its first-ever quarterly outcomes since going public by way of its current IPO. The corporate delivered 11 electrical autos (EVs) in whole through the third quarter of 2021, bringing in roughly $1 million in income. In the meantime, its market capitalization (market cap) was a princely $100 billion on the time of the quarterly launch. General, the corporate seems loads like Tesla (NASDAQ:TSLA) shortly after it went public, however there are some key variations sounding a be aware of warning.
Picture supply: Rivian.
Rivian is a mirror of Tesla in some methods
As soon as buyers bought a take a look at Rivian’s Q3 earnings report, its share price dropped sharply, bringing its market cap down from $100 billion to a pre-Christmas stage of $88 billion. Some analysts have been taking a look at Rivian’s present place and arguing that it is fairly much like Tesla’s initially of its personal upward climb. That was when Elon Musk’s firm additionally had scant income and little quite a lot of automobile fashions and projections of future manufacturing to offer it inventory market traction.
In line with Rivian administration’s letter to shareholders, the corporate earned simply $1 million in income through the three months ending on Sept. 30. Its internet loss for the interval was $1.23 billion, although $458 million of this was a internet loss on account of convertible notes. This led to a $12.21 internet loss per share, far worse than Wall Avenue analyst consensus predictions of a $6.68 loss per share. Omitting the convertible notes, the corporate’s quarterly internet loss was $776 million.
Whereas present manufacturing is simply a handful of autos, Rivian is trying to the long run as a trigger for optimism. It ended the quarter with $5.2 billion in money; along with the online proceeds from its $13.7 billion in gross IPO proceeds and different, smaller funding sources, says it has round $19.9 billion to work with in attaining its objectives. These objectives embrace boosting its Illinois manufacturing unit’s manufacturing capability from 150,000 to 200,000 autos yearly, together with constructing a second manufacturing unit in Georgia with a 400,000-vehicle manufacturing capability, to start working in 2024.
These metrics and objectives seem engaging, however at this level, they’re principally hypothesis. Rivian has 71,000 pre-orders for its R1T pickup truck, nevertheless it solely has a tiny handful of autos truly on the street. Going from producing 11 autos in 1 / 4 to, theoretically, 150,000 per quarter (primarily based on Rivian’s manufacturing unit estimates) in simply three years is a steep problem even with round $20 billion accessible to fund it. Whereas the sum is sort of two-thirds of the quantity automotive large Ford (NYSE:F) is spending by itself EV manufacturing, the Blue Oval has been a longtime automaker for over a century, giving it deep ranges of data on mass manufacturing and immense sources of equipment, technical employees, and title recognition amongst shoppers across the globe.
Rivian may additionally have misplaced Ford’s technical help after the latter determined to “go it alone” on its EV program in November, canceling its joint EV manufacturing plans with Rivian. One other critical roadblock Rivian should overcome is the very completely different setting it faces as an EV start-up in comparison with Tesla a decade in the past.
The place Rivian’s street forks away from Tesla’s
Whereas Rivian’s present metrics look quite like Tesla’s early days apart from its huge valuation, it is not working in the identical setting. Although hybrid autos existed nicely earlier than it, and EVs had been tried, Tesla was a groundbreaking enterprise, the primary of its sort.
Rivian is working in a really completely different world. Tesla itself is now a dominating pressure with a market cap above $1 trillion, manufacturing round 1,000,000 very fashionable EVs per yr. Ford not too long ago stopped accepting reservations for its upcoming F-150 Lightning electrical pickup at 200,000 vehicles as a result of manufacturing could not sustain with demand. It is also constructing $30 billion price of EV and EV battery services by 2025 for a large manufacturing growth.
Chinese language EV producer Nio (NYSE:NIO) simply unveiled a mid-sized electrical sedan, the ET5, able to difficult the Tesla Mannequin S Plaid on vary and options, and it plans to broaden into 25 international locations over the subsequent few years. It is also now persistently constructing greater than 10,000 autos per thirty days. Nearly each main automaker on the earth is within the means of rolling out electrical autos, and there are numerous different devoted EV start-ups to take care of, too.
Briefly, whereas Rivian resembles early Tesla, Tesla was working with close-to-zero critical competitors, giving it far more leeway as a pioneer. Rivian, in contrast, is making an attempt to interrupt into an EV market already crowded with profitable rivals, who’re busy increasing manufacturing into the a whole bunch of 1000’s after which thousands and thousands, whereas Rivian continues to be making an attempt to get its first few autos bought.
On the plus facet, Rivian does at the very least produce working autos and has preorders for 71,000 R1T pickup trucks. Retail titan Amazon (NASDAQ:AMZN) is working with it to purchase a possible 100,000 supply vans. Truly producing these autos could possibly be an issue, nonetheless, contemplating that Ford could now not be a producing accomplice. In a current CNBC interview, Ford CEO Jim Farley stated Ford is contemplating selling its 12% stake in Rivian as soon as lock-up expires, gaining billions it could possibly return to shareholders or put money into its personal quickly accelerating EV push.
Purchase Rivian now, or await a decrease entry level?
Orders and sheer market enthusiasm for all EV shares are arguably the 2 most important elements holding Rivian’s share worth comparatively excessive proper now. However, in my view, the hurdles and dangers it faces in sustaining or rising this valuation are fairly excessive. The challenges of ramping up manufacturing (presumably with out Ford’s know-how and help), the quite a few highly effective rivals it faces, and the probability Ford will promote its Rivian stake, make me skeptical it should preserve its present inventory worth for much longer.
Rivian could turn out to be a viable electric car stock long-term, nevertheless it appears prone to shed a variety of its present hovering valuation within the meantime. This situation makes ready for a a lot decrease share worth as an entry level a method at the very least price contemplating.
This text represents the opinion of the author, who could disagree with the “official” advice place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even one in every of our personal — helps us all assume critically about investing and make choices that assist us turn out to be smarter, happier, and richer.
-- to www.fool.com ","author":{"@type":"Person","name":"EVdoesit","url":"https://www.onlineev.com/author/evdoesit/","sameAs":["https://www.onlineev.com","onlineev.com"]},"articleSection":["Tesla"],"image":{"@type":"ImageObject","url":"https://www.onlineev.com/wp-content/uploads/2021/12/two-rivian-r1t-pickups-scaled.jpg","width":2560,"height":1707},"publisher":{"@type":"Organization","name":"","url":"https://www.onlineev.com","logo":{"@type":"ImageObject","url":""},"sameAs":["https://twitter.com/onlineev"]}}
On Dec. 16, high-end electrical pickup and SUV maker Rivian Automotive (NASDAQ:RIVN) reported its first-ever quarterly outcomes since going public by way of its current IPO. The corporate delivered 11 electrical autos (EVs) in whole through the third quarter of 2021, bringing in roughly $1 million in income. In the meantime, its market capitalization (market cap) was a princely $100 billion on the time of the quarterly launch. General, the corporate seems loads like Tesla (NASDAQ:TSLA) shortly after it went public, however there are some key variations sounding a be aware of warning.
Picture supply: Rivian.
Rivian is a mirror of Tesla in some methods
As soon as buyers bought a take a look at Rivian’s Q3 earnings report, its share price dropped sharply, bringing its market cap down from $100 billion to a pre-Christmas stage of $88 billion. Some analysts have been taking a look at Rivian’s present place and arguing that it is fairly much like Tesla’s initially of its personal upward climb. That was when Elon Musk’s firm additionally had scant income and little quite a lot of automobile fashions and projections of future manufacturing to offer it inventory market traction.
In line with Rivian administration’s letter to shareholders, the corporate earned simply $1 million in income through the three months ending on Sept. 30. Its internet loss for the interval was $1.23 billion, although $458 million of this was a internet loss on account of convertible notes. This led to a $12.21 internet loss per share, far worse than Wall Avenue analyst consensus predictions of a $6.68 loss per share. Omitting the convertible notes, the corporate’s quarterly internet loss was $776 million.
Whereas present manufacturing is simply a handful of autos, Rivian is trying to the long run as a trigger for optimism. It ended the quarter with $5.2 billion in money; along with the online proceeds from its $13.7 billion in gross IPO proceeds and different, smaller funding sources, says it has round $19.9 billion to work with in attaining its objectives. These objectives embrace boosting its Illinois manufacturing unit’s manufacturing capability from 150,000 to 200,000 autos yearly, together with constructing a second manufacturing unit in Georgia with a 400,000-vehicle manufacturing capability, to start working in 2024.
These metrics and objectives seem engaging, however at this level, they’re principally hypothesis. Rivian has 71,000 pre-orders for its R1T pickup truck, nevertheless it solely has a tiny handful of autos truly on the street. Going from producing 11 autos in 1 / 4 to, theoretically, 150,000 per quarter (primarily based on Rivian’s manufacturing unit estimates) in simply three years is a steep problem even with round $20 billion accessible to fund it. Whereas the sum is sort of two-thirds of the quantity automotive large Ford (NYSE:F) is spending by itself EV manufacturing, the Blue Oval has been a longtime automaker for over a century, giving it deep ranges of data on mass manufacturing and immense sources of equipment, technical employees, and title recognition amongst shoppers across the globe.
Rivian may additionally have misplaced Ford’s technical help after the latter determined to “go it alone” on its EV program in November, canceling its joint EV manufacturing plans with Rivian. One other critical roadblock Rivian should overcome is the very completely different setting it faces as an EV start-up in comparison with Tesla a decade in the past.
The place Rivian’s street forks away from Tesla’s
Whereas Rivian’s present metrics look quite like Tesla’s early days apart from its huge valuation, it is not working in the identical setting. Although hybrid autos existed nicely earlier than it, and EVs had been tried, Tesla was a groundbreaking enterprise, the primary of its sort.
Rivian is working in a really completely different world. Tesla itself is now a dominating pressure with a market cap above $1 trillion, manufacturing round 1,000,000 very fashionable EVs per yr. Ford not too long ago stopped accepting reservations for its upcoming F-150 Lightning electrical pickup at 200,000 vehicles as a result of manufacturing could not sustain with demand. It is also constructing $30 billion price of EV and EV battery services by 2025 for a large manufacturing growth.
Chinese language EV producer Nio (NYSE:NIO) simply unveiled a mid-sized electrical sedan, the ET5, able to difficult the Tesla Mannequin S Plaid on vary and options, and it plans to broaden into 25 international locations over the subsequent few years. It is also now persistently constructing greater than 10,000 autos per thirty days. Nearly each main automaker on the earth is within the means of rolling out electrical autos, and there are numerous different devoted EV start-ups to take care of, too.
Briefly, whereas Rivian resembles early Tesla, Tesla was working with close-to-zero critical competitors, giving it far more leeway as a pioneer. Rivian, in contrast, is making an attempt to interrupt into an EV market already crowded with profitable rivals, who’re busy increasing manufacturing into the a whole bunch of 1000’s after which thousands and thousands, whereas Rivian continues to be making an attempt to get its first few autos bought.
On the plus facet, Rivian does at the very least produce working autos and has preorders for 71,000 R1T pickup trucks. Retail titan Amazon (NASDAQ:AMZN) is working with it to purchase a possible 100,000 supply vans. Truly producing these autos could possibly be an issue, nonetheless, contemplating that Ford could now not be a producing accomplice. In a current CNBC interview, Ford CEO Jim Farley stated Ford is contemplating selling its 12% stake in Rivian as soon as lock-up expires, gaining billions it could possibly return to shareholders or put money into its personal quickly accelerating EV push.
Purchase Rivian now, or await a decrease entry level?
Orders and sheer market enthusiasm for all EV shares are arguably the 2 most important elements holding Rivian’s share worth comparatively excessive proper now. However, in my view, the hurdles and dangers it faces in sustaining or rising this valuation are fairly excessive. The challenges of ramping up manufacturing (presumably with out Ford’s know-how and help), the quite a few highly effective rivals it faces, and the probability Ford will promote its Rivian stake, make me skeptical it should preserve its present inventory worth for much longer.
Rivian could turn out to be a viable electric car stock long-term, nevertheless it appears prone to shed a variety of its present hovering valuation within the meantime. This situation makes ready for a a lot decrease share worth as an entry level a method at the very least price contemplating.
This text represents the opinion of the author, who could disagree with the “official” advice place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even one in every of our personal — helps us all assume critically about investing and make choices that assist us turn out to be smarter, happier, and richer.
-- to www.fool.com ","author":{"@type":"Person","name":"EVdoesit","url":"https://www.onlineev.com/author/evdoesit/","sameAs":["https://www.onlineev.com","onlineev.com"]},"articleSection":["Tesla"],"image":{"@type":"ImageObject","url":"https://www.onlineev.com/wp-content/uploads/2021/12/two-rivian-r1t-pickups-scaled.jpg","width":2560,"height":1707},"publisher":{"@type":"Organization","name":"","url":"https://www.onlineev.com","logo":{"@type":"ImageObject","url":""},"sameAs":["https://twitter.com/onlineev"]}}
On Dec. 16, high-end electrical pickup and SUV maker Rivian Automotive (NASDAQ:RIVN) reported its first-ever quarterly outcomes since going public by way of its current IPO. The corporate delivered 11 electrical autos (EVs) in whole through the third quarter of 2021, bringing in roughly $1 million in income. In the meantime, its market capitalization (market cap) was a princely $100 billion on the time of the quarterly launch. General, the corporate seems loads like Tesla (NASDAQ:TSLA) shortly after it went public, however there are some key variations sounding a be aware of warning.
Picture supply: Rivian.
Rivian is a mirror of Tesla in some methods
As soon as buyers bought a take a look at Rivian’s Q3 earnings report, its share price dropped sharply, bringing its market cap down from $100 billion to a pre-Christmas stage of $88 billion. Some analysts have been taking a look at Rivian’s present place and arguing that it is fairly much like Tesla’s initially of its personal upward climb. That was when Elon Musk’s firm additionally had scant income and little quite a lot of automobile fashions and projections of future manufacturing to offer it inventory market traction.
In line with Rivian administration’s letter to shareholders, the corporate earned simply $1 million in income through the three months ending on Sept. 30. Its internet loss for the interval was $1.23 billion, although $458 million of this was a internet loss on account of convertible notes. This led to a $12.21 internet loss per share, far worse than Wall Avenue analyst consensus predictions of a $6.68 loss per share. Omitting the convertible notes, the corporate’s quarterly internet loss was $776 million.
Whereas present manufacturing is simply a handful of autos, Rivian is trying to the long run as a trigger for optimism. It ended the quarter with $5.2 billion in money; along with the online proceeds from its $13.7 billion in gross IPO proceeds and different, smaller funding sources, says it has round $19.9 billion to work with in attaining its objectives. These objectives embrace boosting its Illinois manufacturing unit’s manufacturing capability from 150,000 to 200,000 autos yearly, together with constructing a second manufacturing unit in Georgia with a 400,000-vehicle manufacturing capability, to start working in 2024.
These metrics and objectives seem engaging, however at this level, they’re principally hypothesis. Rivian has 71,000 pre-orders for its R1T pickup truck, nevertheless it solely has a tiny handful of autos truly on the street. Going from producing 11 autos in 1 / 4 to, theoretically, 150,000 per quarter (primarily based on Rivian’s manufacturing unit estimates) in simply three years is a steep problem even with round $20 billion accessible to fund it. Whereas the sum is sort of two-thirds of the quantity automotive large Ford (NYSE:F) is spending by itself EV manufacturing, the Blue Oval has been a longtime automaker for over a century, giving it deep ranges of data on mass manufacturing and immense sources of equipment, technical employees, and title recognition amongst shoppers across the globe.
Rivian may additionally have misplaced Ford’s technical help after the latter determined to “go it alone” on its EV program in November, canceling its joint EV manufacturing plans with Rivian. One other critical roadblock Rivian should overcome is the very completely different setting it faces as an EV start-up in comparison with Tesla a decade in the past.
The place Rivian’s street forks away from Tesla’s
Whereas Rivian’s present metrics look quite like Tesla’s early days apart from its huge valuation, it is not working in the identical setting. Although hybrid autos existed nicely earlier than it, and EVs had been tried, Tesla was a groundbreaking enterprise, the primary of its sort.
Rivian is working in a really completely different world. Tesla itself is now a dominating pressure with a market cap above $1 trillion, manufacturing round 1,000,000 very fashionable EVs per yr. Ford not too long ago stopped accepting reservations for its upcoming F-150 Lightning electrical pickup at 200,000 vehicles as a result of manufacturing could not sustain with demand. It is also constructing $30 billion price of EV and EV battery services by 2025 for a large manufacturing growth.
Chinese language EV producer Nio (NYSE:NIO) simply unveiled a mid-sized electrical sedan, the ET5, able to difficult the Tesla Mannequin S Plaid on vary and options, and it plans to broaden into 25 international locations over the subsequent few years. It is also now persistently constructing greater than 10,000 autos per thirty days. Nearly each main automaker on the earth is within the means of rolling out electrical autos, and there are numerous different devoted EV start-ups to take care of, too.
Briefly, whereas Rivian resembles early Tesla, Tesla was working with close-to-zero critical competitors, giving it far more leeway as a pioneer. Rivian, in contrast, is making an attempt to interrupt into an EV market already crowded with profitable rivals, who’re busy increasing manufacturing into the a whole bunch of 1000’s after which thousands and thousands, whereas Rivian continues to be making an attempt to get its first few autos bought.
On the plus facet, Rivian does at the very least produce working autos and has preorders for 71,000 R1T pickup trucks. Retail titan Amazon (NASDAQ:AMZN) is working with it to purchase a possible 100,000 supply vans. Truly producing these autos could possibly be an issue, nonetheless, contemplating that Ford could now not be a producing accomplice. In a current CNBC interview, Ford CEO Jim Farley stated Ford is contemplating selling its 12% stake in Rivian as soon as lock-up expires, gaining billions it could possibly return to shareholders or put money into its personal quickly accelerating EV push.
Purchase Rivian now, or await a decrease entry level?
Orders and sheer market enthusiasm for all EV shares are arguably the 2 most important elements holding Rivian’s share worth comparatively excessive proper now. However, in my view, the hurdles and dangers it faces in sustaining or rising this valuation are fairly excessive. The challenges of ramping up manufacturing (presumably with out Ford’s know-how and help), the quite a few highly effective rivals it faces, and the probability Ford will promote its Rivian stake, make me skeptical it should preserve its present inventory worth for much longer.
Rivian could turn out to be a viable electric car stock long-term, nevertheless it appears prone to shed a variety of its present hovering valuation within the meantime. This situation makes ready for a a lot decrease share worth as an entry level a method at the very least price contemplating.
This text represents the opinion of the author, who could disagree with the “official” advice place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even one in every of our personal — helps us all assume critically about investing and make choices that assist us turn out to be smarter, happier, and richer.
-- to www.fool.com ","author":{"@type":"Person","name":"EVdoesit","url":"https://www.onlineev.com/author/evdoesit/","sameAs":["https://www.onlineev.com","onlineev.com"]},"articleSection":["Tesla"],"image":{"@type":"ImageObject","url":"https://www.onlineev.com/wp-content/uploads/2021/12/two-rivian-r1t-pickups-scaled.jpg","width":2560,"height":1707},"publisher":{"@type":"Organization","name":"","url":"https://www.onlineev.com","logo":{"@type":"ImageObject","url":""},"sameAs":["https://twitter.com/onlineev"]}}
On Dec. 16, high-end electrical pickup and SUV maker Rivian Automotive (NASDAQ:RIVN) reported its first-ever quarterly outcomes since going public by way of its current IPO. The corporate delivered 11 electrical autos (EVs) in whole through the third quarter of 2021, bringing in roughly $1 million in income. In the meantime, its market capitalization (market cap) was a princely $100 billion on the time of the quarterly launch. General, the corporate seems loads like Tesla (NASDAQ:TSLA) shortly after it went public, however there are some key variations sounding a be aware of warning.
Picture supply: Rivian.
Rivian is a mirror of Tesla in some methods
As soon as buyers bought a take a look at Rivian’s Q3 earnings report, its share price dropped sharply, bringing its market cap down from $100 billion to a pre-Christmas stage of $88 billion. Some analysts have been taking a look at Rivian’s present place and arguing that it is fairly much like Tesla’s initially of its personal upward climb. That was when Elon Musk’s firm additionally had scant income and little quite a lot of automobile fashions and projections of future manufacturing to offer it inventory market traction.
In line with Rivian administration’s letter to shareholders, the corporate earned simply $1 million in income through the three months ending on Sept. 30. Its internet loss for the interval was $1.23 billion, although $458 million of this was a internet loss on account of convertible notes. This led to a $12.21 internet loss per share, far worse than Wall Avenue analyst consensus predictions of a $6.68 loss per share. Omitting the convertible notes, the corporate’s quarterly internet loss was $776 million.
Whereas present manufacturing is simply a handful of autos, Rivian is trying to the long run as a trigger for optimism. It ended the quarter with $5.2 billion in money; along with the online proceeds from its $13.7 billion in gross IPO proceeds and different, smaller funding sources, says it has round $19.9 billion to work with in attaining its objectives. These objectives embrace boosting its Illinois manufacturing unit’s manufacturing capability from 150,000 to 200,000 autos yearly, together with constructing a second manufacturing unit in Georgia with a 400,000-vehicle manufacturing capability, to start working in 2024.
These metrics and objectives seem engaging, however at this level, they’re principally hypothesis. Rivian has 71,000 pre-orders for its R1T pickup truck, nevertheless it solely has a tiny handful of autos truly on the street. Going from producing 11 autos in 1 / 4 to, theoretically, 150,000 per quarter (primarily based on Rivian’s manufacturing unit estimates) in simply three years is a steep problem even with round $20 billion accessible to fund it. Whereas the sum is sort of two-thirds of the quantity automotive large Ford (NYSE:F) is spending by itself EV manufacturing, the Blue Oval has been a longtime automaker for over a century, giving it deep ranges of data on mass manufacturing and immense sources of equipment, technical employees, and title recognition amongst shoppers across the globe.
Rivian may additionally have misplaced Ford’s technical help after the latter determined to “go it alone” on its EV program in November, canceling its joint EV manufacturing plans with Rivian. One other critical roadblock Rivian should overcome is the very completely different setting it faces as an EV start-up in comparison with Tesla a decade in the past.
The place Rivian’s street forks away from Tesla’s
Whereas Rivian’s present metrics look quite like Tesla’s early days apart from its huge valuation, it is not working in the identical setting. Although hybrid autos existed nicely earlier than it, and EVs had been tried, Tesla was a groundbreaking enterprise, the primary of its sort.
Rivian is working in a really completely different world. Tesla itself is now a dominating pressure with a market cap above $1 trillion, manufacturing round 1,000,000 very fashionable EVs per yr. Ford not too long ago stopped accepting reservations for its upcoming F-150 Lightning electrical pickup at 200,000 vehicles as a result of manufacturing could not sustain with demand. It is also constructing $30 billion price of EV and EV battery services by 2025 for a large manufacturing growth.
Chinese language EV producer Nio (NYSE:NIO) simply unveiled a mid-sized electrical sedan, the ET5, able to difficult the Tesla Mannequin S Plaid on vary and options, and it plans to broaden into 25 international locations over the subsequent few years. It is also now persistently constructing greater than 10,000 autos per thirty days. Nearly each main automaker on the earth is within the means of rolling out electrical autos, and there are numerous different devoted EV start-ups to take care of, too.
Briefly, whereas Rivian resembles early Tesla, Tesla was working with close-to-zero critical competitors, giving it far more leeway as a pioneer. Rivian, in contrast, is making an attempt to interrupt into an EV market already crowded with profitable rivals, who’re busy increasing manufacturing into the a whole bunch of 1000’s after which thousands and thousands, whereas Rivian continues to be making an attempt to get its first few autos bought.
On the plus facet, Rivian does at the very least produce working autos and has preorders for 71,000 R1T pickup trucks. Retail titan Amazon (NASDAQ:AMZN) is working with it to purchase a possible 100,000 supply vans. Truly producing these autos could possibly be an issue, nonetheless, contemplating that Ford could now not be a producing accomplice. In a current CNBC interview, Ford CEO Jim Farley stated Ford is contemplating selling its 12% stake in Rivian as soon as lock-up expires, gaining billions it could possibly return to shareholders or put money into its personal quickly accelerating EV push.
Purchase Rivian now, or await a decrease entry level?
Orders and sheer market enthusiasm for all EV shares are arguably the 2 most important elements holding Rivian’s share worth comparatively excessive proper now. However, in my view, the hurdles and dangers it faces in sustaining or rising this valuation are fairly excessive. The challenges of ramping up manufacturing (presumably with out Ford’s know-how and help), the quite a few highly effective rivals it faces, and the probability Ford will promote its Rivian stake, make me skeptical it should preserve its present inventory worth for much longer.
Rivian could turn out to be a viable electric car stock long-term, nevertheless it appears prone to shed a variety of its present hovering valuation within the meantime. This situation makes ready for a a lot decrease share worth as an entry level a method at the very least price contemplating.
This text represents the opinion of the author, who could disagree with the “official” advice place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even one in every of our personal — helps us all assume critically about investing and make choices that assist us turn out to be smarter, happier, and richer.
-- to www.fool.com ","author":{"@type":"Person","name":"EVdoesit","url":"https://www.onlineev.com/author/evdoesit/","sameAs":["https://www.onlineev.com","onlineev.com"]},"articleSection":["Tesla"],"image":{"@type":"ImageObject","url":"https://www.onlineev.com/wp-content/uploads/2021/12/two-rivian-r1t-pickups-scaled.jpg","width":2560,"height":1707},"publisher":{"@type":"Organization","name":"","url":"https://www.onlineev.com","logo":{"@type":"ImageObject","url":""},"sameAs":["https://twitter.com/onlineev"]}}
On Dec. 16, high-end electrical pickup and SUV maker Rivian Automotive (NASDAQ:RIVN) reported its first-ever quarterly outcomes since going public by way of its current IPO. The corporate delivered 11 electrical autos (EVs) in whole through the third quarter of 2021, bringing in roughly $1 million in income. In the meantime, its market capitalization (market cap) was a princely $100 billion on the time of the quarterly launch. General, the corporate seems loads like Tesla (NASDAQ:TSLA) shortly after it went public, however there are some key variations sounding a be aware of warning.
Picture supply: Rivian.
Rivian is a mirror of Tesla in some methods
As soon as buyers bought a take a look at Rivian’s Q3 earnings report, its share price dropped sharply, bringing its market cap down from $100 billion to a pre-Christmas stage of $88 billion. Some analysts have been taking a look at Rivian’s present place and arguing that it is fairly much like Tesla’s initially of its personal upward climb. That was when Elon Musk’s firm additionally had scant income and little quite a lot of automobile fashions and projections of future manufacturing to offer it inventory market traction.
In line with Rivian administration’s letter to shareholders, the corporate earned simply $1 million in income through the three months ending on Sept. 30. Its internet loss for the interval was $1.23 billion, although $458 million of this was a internet loss on account of convertible notes. This led to a $12.21 internet loss per share, far worse than Wall Avenue analyst consensus predictions of a $6.68 loss per share. Omitting the convertible notes, the corporate’s quarterly internet loss was $776 million.
Whereas present manufacturing is simply a handful of autos, Rivian is trying to the long run as a trigger for optimism. It ended the quarter with $5.2 billion in money; along with the online proceeds from its $13.7 billion in gross IPO proceeds and different, smaller funding sources, says it has round $19.9 billion to work with in attaining its objectives. These objectives embrace boosting its Illinois manufacturing unit’s manufacturing capability from 150,000 to 200,000 autos yearly, together with constructing a second manufacturing unit in Georgia with a 400,000-vehicle manufacturing capability, to start working in 2024.
These metrics and objectives seem engaging, however at this level, they’re principally hypothesis. Rivian has 71,000 pre-orders for its R1T pickup truck, nevertheless it solely has a tiny handful of autos truly on the street. Going from producing 11 autos in 1 / 4 to, theoretically, 150,000 per quarter (primarily based on Rivian’s manufacturing unit estimates) in simply three years is a steep problem even with round $20 billion accessible to fund it. Whereas the sum is sort of two-thirds of the quantity automotive large Ford (NYSE:F) is spending by itself EV manufacturing, the Blue Oval has been a longtime automaker for over a century, giving it deep ranges of data on mass manufacturing and immense sources of equipment, technical employees, and title recognition amongst shoppers across the globe.
Rivian may additionally have misplaced Ford’s technical help after the latter determined to “go it alone” on its EV program in November, canceling its joint EV manufacturing plans with Rivian. One other critical roadblock Rivian should overcome is the very completely different setting it faces as an EV start-up in comparison with Tesla a decade in the past.
The place Rivian’s street forks away from Tesla’s
Whereas Rivian’s present metrics look quite like Tesla’s early days apart from its huge valuation, it is not working in the identical setting. Although hybrid autos existed nicely earlier than it, and EVs had been tried, Tesla was a groundbreaking enterprise, the primary of its sort.
Rivian is working in a really completely different world. Tesla itself is now a dominating pressure with a market cap above $1 trillion, manufacturing round 1,000,000 very fashionable EVs per yr. Ford not too long ago stopped accepting reservations for its upcoming F-150 Lightning electrical pickup at 200,000 vehicles as a result of manufacturing could not sustain with demand. It is also constructing $30 billion price of EV and EV battery services by 2025 for a large manufacturing growth.
Chinese language EV producer Nio (NYSE:NIO) simply unveiled a mid-sized electrical sedan, the ET5, able to difficult the Tesla Mannequin S Plaid on vary and options, and it plans to broaden into 25 international locations over the subsequent few years. It is also now persistently constructing greater than 10,000 autos per thirty days. Nearly each main automaker on the earth is within the means of rolling out electrical autos, and there are numerous different devoted EV start-ups to take care of, too.
Briefly, whereas Rivian resembles early Tesla, Tesla was working with close-to-zero critical competitors, giving it far more leeway as a pioneer. Rivian, in contrast, is making an attempt to interrupt into an EV market already crowded with profitable rivals, who’re busy increasing manufacturing into the a whole bunch of 1000’s after which thousands and thousands, whereas Rivian continues to be making an attempt to get its first few autos bought.
On the plus facet, Rivian does at the very least produce working autos and has preorders for 71,000 R1T pickup trucks. Retail titan Amazon (NASDAQ:AMZN) is working with it to purchase a possible 100,000 supply vans. Truly producing these autos could possibly be an issue, nonetheless, contemplating that Ford could now not be a producing accomplice. In a current CNBC interview, Ford CEO Jim Farley stated Ford is contemplating selling its 12% stake in Rivian as soon as lock-up expires, gaining billions it could possibly return to shareholders or put money into its personal quickly accelerating EV push.
Purchase Rivian now, or await a decrease entry level?
Orders and sheer market enthusiasm for all EV shares are arguably the 2 most important elements holding Rivian’s share worth comparatively excessive proper now. However, in my view, the hurdles and dangers it faces in sustaining or rising this valuation are fairly excessive. The challenges of ramping up manufacturing (presumably with out Ford’s know-how and help), the quite a few highly effective rivals it faces, and the probability Ford will promote its Rivian stake, make me skeptical it should preserve its present inventory worth for much longer.
Rivian could turn out to be a viable electric car stock long-term, nevertheless it appears prone to shed a variety of its present hovering valuation within the meantime. This situation makes ready for a a lot decrease share worth as an entry level a method at the very least price contemplating.
This text represents the opinion of the author, who could disagree with the “official” advice place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even one in every of our personal — helps us all assume critically about investing and make choices that assist us turn out to be smarter, happier, and richer.
-- to www.fool.com ","author":{"@type":"Person","name":"EVdoesit","url":"https://www.onlineev.com/author/evdoesit/","sameAs":["https://www.onlineev.com","onlineev.com"]},"articleSection":["Tesla"],"image":{"@type":"ImageObject","url":"https://www.onlineev.com/wp-content/uploads/2021/12/two-rivian-r1t-pickups-scaled.jpg","width":2560,"height":1707},"publisher":{"@type":"Organization","name":"","url":"https://www.onlineev.com","logo":{"@type":"ImageObject","url":""},"sameAs":["https://twitter.com/onlineev"]}}
On Dec. 16, high-end electrical pickup and SUV maker Rivian Automotive (NASDAQ:RIVN) reported its first-ever quarterly outcomes since going public by way of its current IPO. The corporate delivered 11 electrical autos (EVs) in whole through the third quarter of 2021, bringing in roughly $1 million in income. In the meantime, its market capitalization (market cap) was a princely $100 billion on the time of the quarterly launch. General, the corporate seems loads like Tesla (NASDAQ:TSLA) shortly after it went public, however there are some key variations sounding a be aware of warning.
Picture supply: Rivian.
Rivian is a mirror of Tesla in some methods
As soon as buyers bought a take a look at Rivian’s Q3 earnings report, its share price dropped sharply, bringing its market cap down from $100 billion to a pre-Christmas stage of $88 billion. Some analysts have been taking a look at Rivian’s present place and arguing that it is fairly much like Tesla’s initially of its personal upward climb. That was when Elon Musk’s firm additionally had scant income and little quite a lot of automobile fashions and projections of future manufacturing to offer it inventory market traction.
In line with Rivian administration’s letter to shareholders, the corporate earned simply $1 million in income through the three months ending on Sept. 30. Its internet loss for the interval was $1.23 billion, although $458 million of this was a internet loss on account of convertible notes. This led to a $12.21 internet loss per share, far worse than Wall Avenue analyst consensus predictions of a $6.68 loss per share. Omitting the convertible notes, the corporate’s quarterly internet loss was $776 million.
Whereas present manufacturing is simply a handful of autos, Rivian is trying to the long run as a trigger for optimism. It ended the quarter with $5.2 billion in money; along with the online proceeds from its $13.7 billion in gross IPO proceeds and different, smaller funding sources, says it has round $19.9 billion to work with in attaining its objectives. These objectives embrace boosting its Illinois manufacturing unit’s manufacturing capability from 150,000 to 200,000 autos yearly, together with constructing a second manufacturing unit in Georgia with a 400,000-vehicle manufacturing capability, to start working in 2024.
These metrics and objectives seem engaging, however at this level, they’re principally hypothesis. Rivian has 71,000 pre-orders for its R1T pickup truck, nevertheless it solely has a tiny handful of autos truly on the street. Going from producing 11 autos in 1 / 4 to, theoretically, 150,000 per quarter (primarily based on Rivian’s manufacturing unit estimates) in simply three years is a steep problem even with round $20 billion accessible to fund it. Whereas the sum is sort of two-thirds of the quantity automotive large Ford (NYSE:F) is spending by itself EV manufacturing, the Blue Oval has been a longtime automaker for over a century, giving it deep ranges of data on mass manufacturing and immense sources of equipment, technical employees, and title recognition amongst shoppers across the globe.
Rivian may additionally have misplaced Ford’s technical help after the latter determined to “go it alone” on its EV program in November, canceling its joint EV manufacturing plans with Rivian. One other critical roadblock Rivian should overcome is the very completely different setting it faces as an EV start-up in comparison with Tesla a decade in the past.
The place Rivian’s street forks away from Tesla’s
Whereas Rivian’s present metrics look quite like Tesla’s early days apart from its huge valuation, it is not working in the identical setting. Although hybrid autos existed nicely earlier than it, and EVs had been tried, Tesla was a groundbreaking enterprise, the primary of its sort.
Rivian is working in a really completely different world. Tesla itself is now a dominating pressure with a market cap above $1 trillion, manufacturing round 1,000,000 very fashionable EVs per yr. Ford not too long ago stopped accepting reservations for its upcoming F-150 Lightning electrical pickup at 200,000 vehicles as a result of manufacturing could not sustain with demand. It is also constructing $30 billion price of EV and EV battery services by 2025 for a large manufacturing growth.
Chinese language EV producer Nio (NYSE:NIO) simply unveiled a mid-sized electrical sedan, the ET5, able to difficult the Tesla Mannequin S Plaid on vary and options, and it plans to broaden into 25 international locations over the subsequent few years. It is also now persistently constructing greater than 10,000 autos per thirty days. Nearly each main automaker on the earth is within the means of rolling out electrical autos, and there are numerous different devoted EV start-ups to take care of, too.
Briefly, whereas Rivian resembles early Tesla, Tesla was working with close-to-zero critical competitors, giving it far more leeway as a pioneer. Rivian, in contrast, is making an attempt to interrupt into an EV market already crowded with profitable rivals, who’re busy increasing manufacturing into the a whole bunch of 1000’s after which thousands and thousands, whereas Rivian continues to be making an attempt to get its first few autos bought.
On the plus facet, Rivian does at the very least produce working autos and has preorders for 71,000 R1T pickup trucks. Retail titan Amazon (NASDAQ:AMZN) is working with it to purchase a possible 100,000 supply vans. Truly producing these autos could possibly be an issue, nonetheless, contemplating that Ford could now not be a producing accomplice. In a current CNBC interview, Ford CEO Jim Farley stated Ford is contemplating selling its 12% stake in Rivian as soon as lock-up expires, gaining billions it could possibly return to shareholders or put money into its personal quickly accelerating EV push.
Purchase Rivian now, or await a decrease entry level?
Orders and sheer market enthusiasm for all EV shares are arguably the 2 most important elements holding Rivian’s share worth comparatively excessive proper now. However, in my view, the hurdles and dangers it faces in sustaining or rising this valuation are fairly excessive. The challenges of ramping up manufacturing (presumably with out Ford’s know-how and help), the quite a few highly effective rivals it faces, and the probability Ford will promote its Rivian stake, make me skeptical it should preserve its present inventory worth for much longer.
Rivian could turn out to be a viable electric car stock long-term, nevertheless it appears prone to shed a variety of its present hovering valuation within the meantime. This situation makes ready for a a lot decrease share worth as an entry level a method at the very least price contemplating.
This text represents the opinion of the author, who could disagree with the “official” advice place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even one in every of our personal — helps us all assume critically about investing and make choices that assist us turn out to be smarter, happier, and richer.
-- to www.fool.com ","author":{"@type":"Person","name":"EVdoesit","url":"https://www.onlineev.com/author/evdoesit/","sameAs":["https://www.onlineev.com","onlineev.com"]},"articleSection":["Tesla"],"image":{"@type":"ImageObject","url":"https://www.onlineev.com/wp-content/uploads/2021/12/two-rivian-r1t-pickups-scaled.jpg","width":2560,"height":1707},"publisher":{"@type":"Organization","name":"","url":"https://www.onlineev.com","logo":{"@type":"ImageObject","url":""},"sameAs":["https://twitter.com/onlineev"]}}
On Dec. 16, high-end electrical pickup and SUV maker Rivian Automotive (NASDAQ:RIVN) reported its first-ever quarterly outcomes since going public by way of its current IPO. The corporate delivered 11 electrical autos (EVs) in whole through the third quarter of 2021, bringing in roughly $1 million in income. In the meantime, its market capitalization (market cap) was a princely $100 billion on the time of the quarterly launch. General, the corporate seems loads like Tesla (NASDAQ:TSLA) shortly after it went public, however there are some key variations sounding a be aware of warning.
Picture supply: Rivian.
Rivian is a mirror of Tesla in some methods
As soon as buyers bought a take a look at Rivian’s Q3 earnings report, its share price dropped sharply, bringing its market cap down from $100 billion to a pre-Christmas stage of $88 billion. Some analysts have been taking a look at Rivian’s present place and arguing that it is fairly much like Tesla’s initially of its personal upward climb. That was when Elon Musk’s firm additionally had scant income and little quite a lot of automobile fashions and projections of future manufacturing to offer it inventory market traction.
In line with Rivian administration’s letter to shareholders, the corporate earned simply $1 million in income through the three months ending on Sept. 30. Its internet loss for the interval was $1.23 billion, although $458 million of this was a internet loss on account of convertible notes. This led to a $12.21 internet loss per share, far worse than Wall Avenue analyst consensus predictions of a $6.68 loss per share. Omitting the convertible notes, the corporate’s quarterly internet loss was $776 million.
Whereas present manufacturing is simply a handful of autos, Rivian is trying to the long run as a trigger for optimism. It ended the quarter with $5.2 billion in money; along with the online proceeds from its $13.7 billion in gross IPO proceeds and different, smaller funding sources, says it has round $19.9 billion to work with in attaining its objectives. These objectives embrace boosting its Illinois manufacturing unit’s manufacturing capability from 150,000 to 200,000 autos yearly, together with constructing a second manufacturing unit in Georgia with a 400,000-vehicle manufacturing capability, to start working in 2024.
These metrics and objectives seem engaging, however at this level, they’re principally hypothesis. Rivian has 71,000 pre-orders for its R1T pickup truck, nevertheless it solely has a tiny handful of autos truly on the street. Going from producing 11 autos in 1 / 4 to, theoretically, 150,000 per quarter (primarily based on Rivian’s manufacturing unit estimates) in simply three years is a steep problem even with round $20 billion accessible to fund it. Whereas the sum is sort of two-thirds of the quantity automotive large Ford (NYSE:F) is spending by itself EV manufacturing, the Blue Oval has been a longtime automaker for over a century, giving it deep ranges of data on mass manufacturing and immense sources of equipment, technical employees, and title recognition amongst shoppers across the globe.
Rivian may additionally have misplaced Ford’s technical help after the latter determined to “go it alone” on its EV program in November, canceling its joint EV manufacturing plans with Rivian. One other critical roadblock Rivian should overcome is the very completely different setting it faces as an EV start-up in comparison with Tesla a decade in the past.
The place Rivian’s street forks away from Tesla’s
Whereas Rivian’s present metrics look quite like Tesla’s early days apart from its huge valuation, it is not working in the identical setting. Although hybrid autos existed nicely earlier than it, and EVs had been tried, Tesla was a groundbreaking enterprise, the primary of its sort.
Rivian is working in a really completely different world. Tesla itself is now a dominating pressure with a market cap above $1 trillion, manufacturing round 1,000,000 very fashionable EVs per yr. Ford not too long ago stopped accepting reservations for its upcoming F-150 Lightning electrical pickup at 200,000 vehicles as a result of manufacturing could not sustain with demand. It is also constructing $30 billion price of EV and EV battery services by 2025 for a large manufacturing growth.
Chinese language EV producer Nio (NYSE:NIO) simply unveiled a mid-sized electrical sedan, the ET5, able to difficult the Tesla Mannequin S Plaid on vary and options, and it plans to broaden into 25 international locations over the subsequent few years. It is also now persistently constructing greater than 10,000 autos per thirty days. Nearly each main automaker on the earth is within the means of rolling out electrical autos, and there are numerous different devoted EV start-ups to take care of, too.
Briefly, whereas Rivian resembles early Tesla, Tesla was working with close-to-zero critical competitors, giving it far more leeway as a pioneer. Rivian, in contrast, is making an attempt to interrupt into an EV market already crowded with profitable rivals, who’re busy increasing manufacturing into the a whole bunch of 1000’s after which thousands and thousands, whereas Rivian continues to be making an attempt to get its first few autos bought.
On the plus facet, Rivian does at the very least produce working autos and has preorders for 71,000 R1T pickup trucks. Retail titan Amazon (NASDAQ:AMZN) is working with it to purchase a possible 100,000 supply vans. Truly producing these autos could possibly be an issue, nonetheless, contemplating that Ford could now not be a producing accomplice. In a current CNBC interview, Ford CEO Jim Farley stated Ford is contemplating selling its 12% stake in Rivian as soon as lock-up expires, gaining billions it could possibly return to shareholders or put money into its personal quickly accelerating EV push.
Purchase Rivian now, or await a decrease entry level?
Orders and sheer market enthusiasm for all EV shares are arguably the 2 most important elements holding Rivian’s share worth comparatively excessive proper now. However, in my view, the hurdles and dangers it faces in sustaining or rising this valuation are fairly excessive. The challenges of ramping up manufacturing (presumably with out Ford’s know-how and help), the quite a few highly effective rivals it faces, and the probability Ford will promote its Rivian stake, make me skeptical it should preserve its present inventory worth for much longer.
Rivian could turn out to be a viable electric car stock long-term, nevertheless it appears prone to shed a variety of its present hovering valuation within the meantime. This situation makes ready for a a lot decrease share worth as an entry level a method at the very least price contemplating.
This text represents the opinion of the author, who could disagree with the “official” advice place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even one in every of our personal — helps us all assume critically about investing and make choices that assist us turn out to be smarter, happier, and richer.
-- to www.fool.com ","author":{"@type":"Person","name":"EVdoesit","url":"https://www.onlineev.com/author/evdoesit/","sameAs":["https://www.onlineev.com","onlineev.com"]},"articleSection":["Tesla"],"image":{"@type":"ImageObject","url":"https://www.onlineev.com/wp-content/uploads/2021/12/two-rivian-r1t-pickups-scaled.jpg","width":2560,"height":1707},"publisher":{"@type":"Organization","name":"","url":"https://www.onlineev.com","logo":{"@type":"ImageObject","url":""},"sameAs":["https://twitter.com/onlineev"]}}
On Dec. 16, high-end electrical pickup and SUV maker Rivian Automotive (NASDAQ:RIVN) reported its first-ever quarterly outcomes since going public by way of its current IPO. The corporate delivered 11 electrical autos (EVs) in whole through the third quarter of 2021, bringing in roughly $1 million in income. In the meantime, its market capitalization (market cap) was a princely $100 billion on the time of the quarterly launch. General, the corporate seems loads like Tesla (NASDAQ:TSLA) shortly after it went public, however there are some key variations sounding a be aware of warning.
Picture supply: Rivian.
Rivian is a mirror of Tesla in some methods
As soon as buyers bought a take a look at Rivian’s Q3 earnings report, its share price dropped sharply, bringing its market cap down from $100 billion to a pre-Christmas stage of $88 billion. Some analysts have been taking a look at Rivian’s present place and arguing that it is fairly much like Tesla’s initially of its personal upward climb. That was when Elon Musk’s firm additionally had scant income and little quite a lot of automobile fashions and projections of future manufacturing to offer it inventory market traction.
In line with Rivian administration’s letter to shareholders, the corporate earned simply $1 million in income through the three months ending on Sept. 30. Its internet loss for the interval was $1.23 billion, although $458 million of this was a internet loss on account of convertible notes. This led to a $12.21 internet loss per share, far worse than Wall Avenue analyst consensus predictions of a $6.68 loss per share. Omitting the convertible notes, the corporate’s quarterly internet loss was $776 million.
Whereas present manufacturing is simply a handful of autos, Rivian is trying to the long run as a trigger for optimism. It ended the quarter with $5.2 billion in money; along with the online proceeds from its $13.7 billion in gross IPO proceeds and different, smaller funding sources, says it has round $19.9 billion to work with in attaining its objectives. These objectives embrace boosting its Illinois manufacturing unit’s manufacturing capability from 150,000 to 200,000 autos yearly, together with constructing a second manufacturing unit in Georgia with a 400,000-vehicle manufacturing capability, to start working in 2024.
These metrics and objectives seem engaging, however at this level, they’re principally hypothesis. Rivian has 71,000 pre-orders for its R1T pickup truck, nevertheless it solely has a tiny handful of autos truly on the street. Going from producing 11 autos in 1 / 4 to, theoretically, 150,000 per quarter (primarily based on Rivian’s manufacturing unit estimates) in simply three years is a steep problem even with round $20 billion accessible to fund it. Whereas the sum is sort of two-thirds of the quantity automotive large Ford (NYSE:F) is spending by itself EV manufacturing, the Blue Oval has been a longtime automaker for over a century, giving it deep ranges of data on mass manufacturing and immense sources of equipment, technical employees, and title recognition amongst shoppers across the globe.
Rivian may additionally have misplaced Ford’s technical help after the latter determined to “go it alone” on its EV program in November, canceling its joint EV manufacturing plans with Rivian. One other critical roadblock Rivian should overcome is the very completely different setting it faces as an EV start-up in comparison with Tesla a decade in the past.
The place Rivian’s street forks away from Tesla’s
Whereas Rivian’s present metrics look quite like Tesla’s early days apart from its huge valuation, it is not working in the identical setting. Although hybrid autos existed nicely earlier than it, and EVs had been tried, Tesla was a groundbreaking enterprise, the primary of its sort.
Rivian is working in a really completely different world. Tesla itself is now a dominating pressure with a market cap above $1 trillion, manufacturing round 1,000,000 very fashionable EVs per yr. Ford not too long ago stopped accepting reservations for its upcoming F-150 Lightning electrical pickup at 200,000 vehicles as a result of manufacturing could not sustain with demand. It is also constructing $30 billion price of EV and EV battery services by 2025 for a large manufacturing growth.
Chinese language EV producer Nio (NYSE:NIO) simply unveiled a mid-sized electrical sedan, the ET5, able to difficult the Tesla Mannequin S Plaid on vary and options, and it plans to broaden into 25 international locations over the subsequent few years. It is also now persistently constructing greater than 10,000 autos per thirty days. Nearly each main automaker on the earth is within the means of rolling out electrical autos, and there are numerous different devoted EV start-ups to take care of, too.
Briefly, whereas Rivian resembles early Tesla, Tesla was working with close-to-zero critical competitors, giving it far more leeway as a pioneer. Rivian, in contrast, is making an attempt to interrupt into an EV market already crowded with profitable rivals, who’re busy increasing manufacturing into the a whole bunch of 1000’s after which thousands and thousands, whereas Rivian continues to be making an attempt to get its first few autos bought.
On the plus facet, Rivian does at the very least produce working autos and has preorders for 71,000 R1T pickup trucks. Retail titan Amazon (NASDAQ:AMZN) is working with it to purchase a possible 100,000 supply vans. Truly producing these autos could possibly be an issue, nonetheless, contemplating that Ford could now not be a producing accomplice. In a current CNBC interview, Ford CEO Jim Farley stated Ford is contemplating selling its 12% stake in Rivian as soon as lock-up expires, gaining billions it could possibly return to shareholders or put money into its personal quickly accelerating EV push.
Purchase Rivian now, or await a decrease entry level?
Orders and sheer market enthusiasm for all EV shares are arguably the 2 most important elements holding Rivian’s share worth comparatively excessive proper now. However, in my view, the hurdles and dangers it faces in sustaining or rising this valuation are fairly excessive. The challenges of ramping up manufacturing (presumably with out Ford’s know-how and help), the quite a few highly effective rivals it faces, and the probability Ford will promote its Rivian stake, make me skeptical it should preserve its present inventory worth for much longer.
Rivian could turn out to be a viable electric car stock long-term, nevertheless it appears prone to shed a variety of its present hovering valuation within the meantime. This situation makes ready for a a lot decrease share worth as an entry level a method at the very least price contemplating.
This text represents the opinion of the author, who could disagree with the “official” advice place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even one in every of our personal — helps us all assume critically about investing and make choices that assist us turn out to be smarter, happier, and richer.
-- to www.fool.com ","author":{"@type":"Person","name":"EVdoesit","url":"https://www.onlineev.com/author/evdoesit/","sameAs":["https://www.onlineev.com","onlineev.com"]},"articleSection":["Tesla"],"image":{"@type":"ImageObject","url":"https://www.onlineev.com/wp-content/uploads/2021/12/two-rivian-r1t-pickups-scaled.jpg","width":2560,"height":1707},"publisher":{"@type":"Organization","name":"","url":"https://www.onlineev.com","logo":{"@type":"ImageObject","url":""},"sameAs":["https://twitter.com/onlineev"]}}
On Dec. 16, high-end electrical pickup and SUV maker Rivian Automotive (NASDAQ:RIVN) reported its first-ever quarterly outcomes since going public by way of its current IPO. The corporate delivered 11 electrical autos (EVs) in whole through the third quarter of 2021, bringing in roughly $1 million in income. In the meantime, its market capitalization (market cap) was a princely $100 billion on the time of the quarterly launch. General, the corporate seems loads like Tesla (NASDAQ:TSLA) shortly after it went public, however there are some key variations sounding a be aware of warning.
Picture supply: Rivian.
Rivian is a mirror of Tesla in some methods
As soon as buyers bought a take a look at Rivian’s Q3 earnings report, its share price dropped sharply, bringing its market cap down from $100 billion to a pre-Christmas stage of $88 billion. Some analysts have been taking a look at Rivian’s present place and arguing that it is fairly much like Tesla’s initially of its personal upward climb. That was when Elon Musk’s firm additionally had scant income and little quite a lot of automobile fashions and projections of future manufacturing to offer it inventory market traction.
In line with Rivian administration’s letter to shareholders, the corporate earned simply $1 million in income through the three months ending on Sept. 30. Its internet loss for the interval was $1.23 billion, although $458 million of this was a internet loss on account of convertible notes. This led to a $12.21 internet loss per share, far worse than Wall Avenue analyst consensus predictions of a $6.68 loss per share. Omitting the convertible notes, the corporate’s quarterly internet loss was $776 million.
Whereas present manufacturing is simply a handful of autos, Rivian is trying to the long run as a trigger for optimism. It ended the quarter with $5.2 billion in money; along with the online proceeds from its $13.7 billion in gross IPO proceeds and different, smaller funding sources, says it has round $19.9 billion to work with in attaining its objectives. These objectives embrace boosting its Illinois manufacturing unit’s manufacturing capability from 150,000 to 200,000 autos yearly, together with constructing a second manufacturing unit in Georgia with a 400,000-vehicle manufacturing capability, to start working in 2024.
These metrics and objectives seem engaging, however at this level, they’re principally hypothesis. Rivian has 71,000 pre-orders for its R1T pickup truck, nevertheless it solely has a tiny handful of autos truly on the street. Going from producing 11 autos in 1 / 4 to, theoretically, 150,000 per quarter (primarily based on Rivian’s manufacturing unit estimates) in simply three years is a steep problem even with round $20 billion accessible to fund it. Whereas the sum is sort of two-thirds of the quantity automotive large Ford (NYSE:F) is spending by itself EV manufacturing, the Blue Oval has been a longtime automaker for over a century, giving it deep ranges of data on mass manufacturing and immense sources of equipment, technical employees, and title recognition amongst shoppers across the globe.
Rivian may additionally have misplaced Ford’s technical help after the latter determined to “go it alone” on its EV program in November, canceling its joint EV manufacturing plans with Rivian. One other critical roadblock Rivian should overcome is the very completely different setting it faces as an EV start-up in comparison with Tesla a decade in the past.
The place Rivian’s street forks away from Tesla’s
Whereas Rivian’s present metrics look quite like Tesla’s early days apart from its huge valuation, it is not working in the identical setting. Although hybrid autos existed nicely earlier than it, and EVs had been tried, Tesla was a groundbreaking enterprise, the primary of its sort.
Rivian is working in a really completely different world. Tesla itself is now a dominating pressure with a market cap above $1 trillion, manufacturing round 1,000,000 very fashionable EVs per yr. Ford not too long ago stopped accepting reservations for its upcoming F-150 Lightning electrical pickup at 200,000 vehicles as a result of manufacturing could not sustain with demand. It is also constructing $30 billion price of EV and EV battery services by 2025 for a large manufacturing growth.
Chinese language EV producer Nio (NYSE:NIO) simply unveiled a mid-sized electrical sedan, the ET5, able to difficult the Tesla Mannequin S Plaid on vary and options, and it plans to broaden into 25 international locations over the subsequent few years. It is also now persistently constructing greater than 10,000 autos per thirty days. Nearly each main automaker on the earth is within the means of rolling out electrical autos, and there are numerous different devoted EV start-ups to take care of, too.
Briefly, whereas Rivian resembles early Tesla, Tesla was working with close-to-zero critical competitors, giving it far more leeway as a pioneer. Rivian, in contrast, is making an attempt to interrupt into an EV market already crowded with profitable rivals, who’re busy increasing manufacturing into the a whole bunch of 1000’s after which thousands and thousands, whereas Rivian continues to be making an attempt to get its first few autos bought.
On the plus facet, Rivian does at the very least produce working autos and has preorders for 71,000 R1T pickup trucks. Retail titan Amazon (NASDAQ:AMZN) is working with it to purchase a possible 100,000 supply vans. Truly producing these autos could possibly be an issue, nonetheless, contemplating that Ford could now not be a producing accomplice. In a current CNBC interview, Ford CEO Jim Farley stated Ford is contemplating selling its 12% stake in Rivian as soon as lock-up expires, gaining billions it could possibly return to shareholders or put money into its personal quickly accelerating EV push.
Purchase Rivian now, or await a decrease entry level?
Orders and sheer market enthusiasm for all EV shares are arguably the 2 most important elements holding Rivian’s share worth comparatively excessive proper now. However, in my view, the hurdles and dangers it faces in sustaining or rising this valuation are fairly excessive. The challenges of ramping up manufacturing (presumably with out Ford’s know-how and help), the quite a few highly effective rivals it faces, and the probability Ford will promote its Rivian stake, make me skeptical it should preserve its present inventory worth for much longer.
Rivian could turn out to be a viable electric car stock long-term, nevertheless it appears prone to shed a variety of its present hovering valuation within the meantime. This situation makes ready for a a lot decrease share worth as an entry level a method at the very least price contemplating.
This text represents the opinion of the author, who could disagree with the “official” advice place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even one in every of our personal — helps us all assume critically about investing and make choices that assist us turn out to be smarter, happier, and richer.
-- to www.fool.com ","author":{"@type":"Person","name":"EVdoesit","url":"https://www.onlineev.com/author/evdoesit/","sameAs":["https://www.onlineev.com","onlineev.com"]},"articleSection":["Tesla"],"image":{"@type":"ImageObject","url":"https://www.onlineev.com/wp-content/uploads/2021/12/two-rivian-r1t-pickups-scaled.jpg","width":2560,"height":1707},"publisher":{"@type":"Organization","name":"","url":"https://www.onlineev.com","logo":{"@type":"ImageObject","url":""},"sameAs":["https://twitter.com/onlineev"]}}
On Dec. 16, high-end electrical pickup and SUV maker Rivian Automotive (NASDAQ:RIVN) reported its first-ever quarterly outcomes since going public by way of its current IPO. The corporate delivered 11 electrical autos (EVs) in whole through the third quarter of 2021, bringing in roughly $1 million in income. In the meantime, its market capitalization (market cap) was a princely $100 billion on the time of the quarterly launch. General, the corporate seems loads like Tesla (NASDAQ:TSLA) shortly after it went public, however there are some key variations sounding a be aware of warning.
Picture supply: Rivian.
Rivian is a mirror of Tesla in some methods
As soon as buyers bought a take a look at Rivian’s Q3 earnings report, its share price dropped sharply, bringing its market cap down from $100 billion to a pre-Christmas stage of $88 billion. Some analysts have been taking a look at Rivian’s present place and arguing that it is fairly much like Tesla’s initially of its personal upward climb. That was when Elon Musk’s firm additionally had scant income and little quite a lot of automobile fashions and projections of future manufacturing to offer it inventory market traction.
In line with Rivian administration’s letter to shareholders, the corporate earned simply $1 million in income through the three months ending on Sept. 30. Its internet loss for the interval was $1.23 billion, although $458 million of this was a internet loss on account of convertible notes. This led to a $12.21 internet loss per share, far worse than Wall Avenue analyst consensus predictions of a $6.68 loss per share. Omitting the convertible notes, the corporate’s quarterly internet loss was $776 million.
Whereas present manufacturing is simply a handful of autos, Rivian is trying to the long run as a trigger for optimism. It ended the quarter with $5.2 billion in money; along with the online proceeds from its $13.7 billion in gross IPO proceeds and different, smaller funding sources, says it has round $19.9 billion to work with in attaining its objectives. These objectives embrace boosting its Illinois manufacturing unit’s manufacturing capability from 150,000 to 200,000 autos yearly, together with constructing a second manufacturing unit in Georgia with a 400,000-vehicle manufacturing capability, to start working in 2024.
These metrics and objectives seem engaging, however at this level, they’re principally hypothesis. Rivian has 71,000 pre-orders for its R1T pickup truck, nevertheless it solely has a tiny handful of autos truly on the street. Going from producing 11 autos in 1 / 4 to, theoretically, 150,000 per quarter (primarily based on Rivian’s manufacturing unit estimates) in simply three years is a steep problem even with round $20 billion accessible to fund it. Whereas the sum is sort of two-thirds of the quantity automotive large Ford (NYSE:F) is spending by itself EV manufacturing, the Blue Oval has been a longtime automaker for over a century, giving it deep ranges of data on mass manufacturing and immense sources of equipment, technical employees, and title recognition amongst shoppers across the globe.
Rivian may additionally have misplaced Ford’s technical help after the latter determined to “go it alone” on its EV program in November, canceling its joint EV manufacturing plans with Rivian. One other critical roadblock Rivian should overcome is the very completely different setting it faces as an EV start-up in comparison with Tesla a decade in the past.
The place Rivian’s street forks away from Tesla’s
Whereas Rivian’s present metrics look quite like Tesla’s early days apart from its huge valuation, it is not working in the identical setting. Although hybrid autos existed nicely earlier than it, and EVs had been tried, Tesla was a groundbreaking enterprise, the primary of its sort.
Rivian is working in a really completely different world. Tesla itself is now a dominating pressure with a market cap above $1 trillion, manufacturing round 1,000,000 very fashionable EVs per yr. Ford not too long ago stopped accepting reservations for its upcoming F-150 Lightning electrical pickup at 200,000 vehicles as a result of manufacturing could not sustain with demand. It is also constructing $30 billion price of EV and EV battery services by 2025 for a large manufacturing growth.
Chinese language EV producer Nio (NYSE:NIO) simply unveiled a mid-sized electrical sedan, the ET5, able to difficult the Tesla Mannequin S Plaid on vary and options, and it plans to broaden into 25 international locations over the subsequent few years. It is also now persistently constructing greater than 10,000 autos per thirty days. Nearly each main automaker on the earth is within the means of rolling out electrical autos, and there are numerous different devoted EV start-ups to take care of, too.
Briefly, whereas Rivian resembles early Tesla, Tesla was working with close-to-zero critical competitors, giving it far more leeway as a pioneer. Rivian, in contrast, is making an attempt to interrupt into an EV market already crowded with profitable rivals, who’re busy increasing manufacturing into the a whole bunch of 1000’s after which thousands and thousands, whereas Rivian continues to be making an attempt to get its first few autos bought.
On the plus facet, Rivian does at the very least produce working autos and has preorders for 71,000 R1T pickup trucks. Retail titan Amazon (NASDAQ:AMZN) is working with it to purchase a possible 100,000 supply vans. Truly producing these autos could possibly be an issue, nonetheless, contemplating that Ford could now not be a producing accomplice. In a current CNBC interview, Ford CEO Jim Farley stated Ford is contemplating selling its 12% stake in Rivian as soon as lock-up expires, gaining billions it could possibly return to shareholders or put money into its personal quickly accelerating EV push.
Purchase Rivian now, or await a decrease entry level?
Orders and sheer market enthusiasm for all EV shares are arguably the 2 most important elements holding Rivian’s share worth comparatively excessive proper now. However, in my view, the hurdles and dangers it faces in sustaining or rising this valuation are fairly excessive. The challenges of ramping up manufacturing (presumably with out Ford’s know-how and help), the quite a few highly effective rivals it faces, and the probability Ford will promote its Rivian stake, make me skeptical it should preserve its present inventory worth for much longer.
Rivian could turn out to be a viable electric car stock long-term, nevertheless it appears prone to shed a variety of its present hovering valuation within the meantime. This situation makes ready for a a lot decrease share worth as an entry level a method at the very least price contemplating.
This text represents the opinion of the author, who could disagree with the “official” advice place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even one in every of our personal — helps us all assume critically about investing and make choices that assist us turn out to be smarter, happier, and richer.
-- to www.fool.com ","author":{"@type":"Person","name":"EVdoesit","url":"https://www.onlineev.com/author/evdoesit/","sameAs":["https://www.onlineev.com","onlineev.com"]},"articleSection":["Tesla"],"image":{"@type":"ImageObject","url":"https://www.onlineev.com/wp-content/uploads/2021/12/two-rivian-r1t-pickups-scaled.jpg","width":2560,"height":1707},"publisher":{"@type":"Organization","name":"","url":"https://www.onlineev.com","logo":{"@type":"ImageObject","url":""},"sameAs":["https://twitter.com/onlineev"]}}
On Dec. 16, high-end electrical pickup and SUV maker Rivian Automotive (NASDAQ:RIVN) reported its first-ever quarterly outcomes since going public by way of its current IPO. The corporate delivered 11 electrical autos (EVs) in whole through the third quarter of 2021, bringing in roughly $1 million in income. In the meantime, its market capitalization (market cap) was a princely $100 billion on the time of the quarterly launch. General, the corporate seems loads like Tesla (NASDAQ:TSLA) shortly after it went public, however there are some key variations sounding a be aware of warning.
Picture supply: Rivian.
Rivian is a mirror of Tesla in some methods
As soon as buyers bought a take a look at Rivian’s Q3 earnings report, its share price dropped sharply, bringing its market cap down from $100 billion to a pre-Christmas stage of $88 billion. Some analysts have been taking a look at Rivian’s present place and arguing that it is fairly much like Tesla’s initially of its personal upward climb. That was when Elon Musk’s firm additionally had scant income and little quite a lot of automobile fashions and projections of future manufacturing to offer it inventory market traction.
In line with Rivian administration’s letter to shareholders, the corporate earned simply $1 million in income through the three months ending on Sept. 30. Its internet loss for the interval was $1.23 billion, although $458 million of this was a internet loss on account of convertible notes. This led to a $12.21 internet loss per share, far worse than Wall Avenue analyst consensus predictions of a $6.68 loss per share. Omitting the convertible notes, the corporate’s quarterly internet loss was $776 million.
Whereas present manufacturing is simply a handful of autos, Rivian is trying to the long run as a trigger for optimism. It ended the quarter with $5.2 billion in money; along with the online proceeds from its $13.7 billion in gross IPO proceeds and different, smaller funding sources, says it has round $19.9 billion to work with in attaining its objectives. These objectives embrace boosting its Illinois manufacturing unit’s manufacturing capability from 150,000 to 200,000 autos yearly, together with constructing a second manufacturing unit in Georgia with a 400,000-vehicle manufacturing capability, to start working in 2024.
These metrics and objectives seem engaging, however at this level, they’re principally hypothesis. Rivian has 71,000 pre-orders for its R1T pickup truck, nevertheless it solely has a tiny handful of autos truly on the street. Going from producing 11 autos in 1 / 4 to, theoretically, 150,000 per quarter (primarily based on Rivian’s manufacturing unit estimates) in simply three years is a steep problem even with round $20 billion accessible to fund it. Whereas the sum is sort of two-thirds of the quantity automotive large Ford (NYSE:F) is spending by itself EV manufacturing, the Blue Oval has been a longtime automaker for over a century, giving it deep ranges of data on mass manufacturing and immense sources of equipment, technical employees, and title recognition amongst shoppers across the globe.
Rivian may additionally have misplaced Ford’s technical help after the latter determined to “go it alone” on its EV program in November, canceling its joint EV manufacturing plans with Rivian. One other critical roadblock Rivian should overcome is the very completely different setting it faces as an EV start-up in comparison with Tesla a decade in the past.
The place Rivian’s street forks away from Tesla’s
Whereas Rivian’s present metrics look quite like Tesla’s early days apart from its huge valuation, it is not working in the identical setting. Although hybrid autos existed nicely earlier than it, and EVs had been tried, Tesla was a groundbreaking enterprise, the primary of its sort.
Rivian is working in a really completely different world. Tesla itself is now a dominating pressure with a market cap above $1 trillion, manufacturing round 1,000,000 very fashionable EVs per yr. Ford not too long ago stopped accepting reservations for its upcoming F-150 Lightning electrical pickup at 200,000 vehicles as a result of manufacturing could not sustain with demand. It is also constructing $30 billion price of EV and EV battery services by 2025 for a large manufacturing growth.
Chinese language EV producer Nio (NYSE:NIO) simply unveiled a mid-sized electrical sedan, the ET5, able to difficult the Tesla Mannequin S Plaid on vary and options, and it plans to broaden into 25 international locations over the subsequent few years. It is also now persistently constructing greater than 10,000 autos per thirty days. Nearly each main automaker on the earth is within the means of rolling out electrical autos, and there are numerous different devoted EV start-ups to take care of, too.
Briefly, whereas Rivian resembles early Tesla, Tesla was working with close-to-zero critical competitors, giving it far more leeway as a pioneer. Rivian, in contrast, is making an attempt to interrupt into an EV market already crowded with profitable rivals, who’re busy increasing manufacturing into the a whole bunch of 1000’s after which thousands and thousands, whereas Rivian continues to be making an attempt to get its first few autos bought.
On the plus facet, Rivian does at the very least produce working autos and has preorders for 71,000 R1T pickup trucks. Retail titan Amazon (NASDAQ:AMZN) is working with it to purchase a possible 100,000 supply vans. Truly producing these autos could possibly be an issue, nonetheless, contemplating that Ford could now not be a producing accomplice. In a current CNBC interview, Ford CEO Jim Farley stated Ford is contemplating selling its 12% stake in Rivian as soon as lock-up expires, gaining billions it could possibly return to shareholders or put money into its personal quickly accelerating EV push.
Purchase Rivian now, or await a decrease entry level?
Orders and sheer market enthusiasm for all EV shares are arguably the 2 most important elements holding Rivian’s share worth comparatively excessive proper now. However, in my view, the hurdles and dangers it faces in sustaining or rising this valuation are fairly excessive. The challenges of ramping up manufacturing (presumably with out Ford’s know-how and help), the quite a few highly effective rivals it faces, and the probability Ford will promote its Rivian stake, make me skeptical it should preserve its present inventory worth for much longer.
Rivian could turn out to be a viable electric car stock long-term, nevertheless it appears prone to shed a variety of its present hovering valuation within the meantime. This situation makes ready for a a lot decrease share worth as an entry level a method at the very least price contemplating.
This text represents the opinion of the author, who could disagree with the “official” advice place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even one in every of our personal — helps us all assume critically about investing and make choices that assist us turn out to be smarter, happier, and richer.
-- to www.fool.com ","author":{"@type":"Person","name":"EVdoesit","url":"https://www.onlineev.com/author/evdoesit/","sameAs":["https://www.onlineev.com","onlineev.com"]},"articleSection":["Tesla"],"image":{"@type":"ImageObject","url":"https://www.onlineev.com/wp-content/uploads/2021/12/two-rivian-r1t-pickups-scaled.jpg","width":2560,"height":1707},"publisher":{"@type":"Organization","name":"","url":"https://www.onlineev.com","logo":{"@type":"ImageObject","url":""},"sameAs":["https://twitter.com/onlineev"]}}
On Dec. 16, high-end electrical pickup and SUV maker Rivian Automotive (NASDAQ:RIVN) reported its first-ever quarterly outcomes since going public by way of its current IPO. The corporate delivered 11 electrical autos (EVs) in whole through the third quarter of 2021, bringing in roughly $1 million in income. In the meantime, its market capitalization (market cap) was a princely $100 billion on the time of the quarterly launch. General, the corporate seems loads like Tesla (NASDAQ:TSLA) shortly after it went public, however there are some key variations sounding a be aware of warning.
Picture supply: Rivian.
Rivian is a mirror of Tesla in some methods
As soon as buyers bought a take a look at Rivian’s Q3 earnings report, its share price dropped sharply, bringing its market cap down from $100 billion to a pre-Christmas stage of $88 billion. Some analysts have been taking a look at Rivian’s present place and arguing that it is fairly much like Tesla’s initially of its personal upward climb. That was when Elon Musk’s firm additionally had scant income and little quite a lot of automobile fashions and projections of future manufacturing to offer it inventory market traction.
In line with Rivian administration’s letter to shareholders, the corporate earned simply $1 million in income through the three months ending on Sept. 30. Its internet loss for the interval was $1.23 billion, although $458 million of this was a internet loss on account of convertible notes. This led to a $12.21 internet loss per share, far worse than Wall Avenue analyst consensus predictions of a $6.68 loss per share. Omitting the convertible notes, the corporate’s quarterly internet loss was $776 million.
Whereas present manufacturing is simply a handful of autos, Rivian is trying to the long run as a trigger for optimism. It ended the quarter with $5.2 billion in money; along with the online proceeds from its $13.7 billion in gross IPO proceeds and different, smaller funding sources, says it has round $19.9 billion to work with in attaining its objectives. These objectives embrace boosting its Illinois manufacturing unit’s manufacturing capability from 150,000 to 200,000 autos yearly, together with constructing a second manufacturing unit in Georgia with a 400,000-vehicle manufacturing capability, to start working in 2024.
These metrics and objectives seem engaging, however at this level, they’re principally hypothesis. Rivian has 71,000 pre-orders for its R1T pickup truck, nevertheless it solely has a tiny handful of autos truly on the street. Going from producing 11 autos in 1 / 4 to, theoretically, 150,000 per quarter (primarily based on Rivian’s manufacturing unit estimates) in simply three years is a steep problem even with round $20 billion accessible to fund it. Whereas the sum is sort of two-thirds of the quantity automotive large Ford (NYSE:F) is spending by itself EV manufacturing, the Blue Oval has been a longtime automaker for over a century, giving it deep ranges of data on mass manufacturing and immense sources of equipment, technical employees, and title recognition amongst shoppers across the globe.
Rivian may additionally have misplaced Ford’s technical help after the latter determined to “go it alone” on its EV program in November, canceling its joint EV manufacturing plans with Rivian. One other critical roadblock Rivian should overcome is the very completely different setting it faces as an EV start-up in comparison with Tesla a decade in the past.
The place Rivian’s street forks away from Tesla’s
Whereas Rivian’s present metrics look quite like Tesla’s early days apart from its huge valuation, it is not working in the identical setting. Although hybrid autos existed nicely earlier than it, and EVs had been tried, Tesla was a groundbreaking enterprise, the primary of its sort.
Rivian is working in a really completely different world. Tesla itself is now a dominating pressure with a market cap above $1 trillion, manufacturing round 1,000,000 very fashionable EVs per yr. Ford not too long ago stopped accepting reservations for its upcoming F-150 Lightning electrical pickup at 200,000 vehicles as a result of manufacturing could not sustain with demand. It is also constructing $30 billion price of EV and EV battery services by 2025 for a large manufacturing growth.
Chinese language EV producer Nio (NYSE:NIO) simply unveiled a mid-sized electrical sedan, the ET5, able to difficult the Tesla Mannequin S Plaid on vary and options, and it plans to broaden into 25 international locations over the subsequent few years. It is also now persistently constructing greater than 10,000 autos per thirty days. Nearly each main automaker on the earth is within the means of rolling out electrical autos, and there are numerous different devoted EV start-ups to take care of, too.
Briefly, whereas Rivian resembles early Tesla, Tesla was working with close-to-zero critical competitors, giving it far more leeway as a pioneer. Rivian, in contrast, is making an attempt to interrupt into an EV market already crowded with profitable rivals, who’re busy increasing manufacturing into the a whole bunch of 1000’s after which thousands and thousands, whereas Rivian continues to be making an attempt to get its first few autos bought.
On the plus facet, Rivian does at the very least produce working autos and has preorders for 71,000 R1T pickup trucks. Retail titan Amazon (NASDAQ:AMZN) is working with it to purchase a possible 100,000 supply vans. Truly producing these autos could possibly be an issue, nonetheless, contemplating that Ford could now not be a producing accomplice. In a current CNBC interview, Ford CEO Jim Farley stated Ford is contemplating selling its 12% stake in Rivian as soon as lock-up expires, gaining billions it could possibly return to shareholders or put money into its personal quickly accelerating EV push.
Purchase Rivian now, or await a decrease entry level?
Orders and sheer market enthusiasm for all EV shares are arguably the 2 most important elements holding Rivian’s share worth comparatively excessive proper now. However, in my view, the hurdles and dangers it faces in sustaining or rising this valuation are fairly excessive. The challenges of ramping up manufacturing (presumably with out Ford’s know-how and help), the quite a few highly effective rivals it faces, and the probability Ford will promote its Rivian stake, make me skeptical it should preserve its present inventory worth for much longer.
Rivian could turn out to be a viable electric car stock long-term, nevertheless it appears prone to shed a variety of its present hovering valuation within the meantime. This situation makes ready for a a lot decrease share worth as an entry level a method at the very least price contemplating.
This text represents the opinion of the author, who could disagree with the “official” advice place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even one in every of our personal — helps us all assume critically about investing and make choices that assist us turn out to be smarter, happier, and richer.
-- to www.fool.com ","author":{"@type":"Person","name":"EVdoesit","url":"https://www.onlineev.com/author/evdoesit/","sameAs":["https://www.onlineev.com","onlineev.com"]},"articleSection":["Tesla"],"image":{"@type":"ImageObject","url":"https://www.onlineev.com/wp-content/uploads/2021/12/two-rivian-r1t-pickups-scaled.jpg","width":2560,"height":1707},"publisher":{"@type":"Organization","name":"","url":"https://www.onlineev.com","logo":{"@type":"ImageObject","url":""},"sameAs":["https://twitter.com/onlineev"]}}
On Dec. 16, high-end electrical pickup and SUV maker Rivian Automotive (NASDAQ:RIVN) reported its first-ever quarterly outcomes since going public by way of its current IPO. The corporate delivered 11 electrical autos (EVs) in whole through the third quarter of 2021, bringing in roughly $1 million in income. In the meantime, its market capitalization (market cap) was a princely $100 billion on the time of the quarterly launch. General, the corporate seems loads like Tesla (NASDAQ:TSLA) shortly after it went public, however there are some key variations sounding a be aware of warning.
Picture supply: Rivian.
Rivian is a mirror of Tesla in some methods
As soon as buyers bought a take a look at Rivian’s Q3 earnings report, its share price dropped sharply, bringing its market cap down from $100 billion to a pre-Christmas stage of $88 billion. Some analysts have been taking a look at Rivian’s present place and arguing that it is fairly much like Tesla’s initially of its personal upward climb. That was when Elon Musk’s firm additionally had scant income and little quite a lot of automobile fashions and projections of future manufacturing to offer it inventory market traction.
In line with Rivian administration’s letter to shareholders, the corporate earned simply $1 million in income through the three months ending on Sept. 30. Its internet loss for the interval was $1.23 billion, although $458 million of this was a internet loss on account of convertible notes. This led to a $12.21 internet loss per share, far worse than Wall Avenue analyst consensus predictions of a $6.68 loss per share. Omitting the convertible notes, the corporate’s quarterly internet loss was $776 million.
Whereas present manufacturing is simply a handful of autos, Rivian is trying to the long run as a trigger for optimism. It ended the quarter with $5.2 billion in money; along with the online proceeds from its $13.7 billion in gross IPO proceeds and different, smaller funding sources, says it has round $19.9 billion to work with in attaining its objectives. These objectives embrace boosting its Illinois manufacturing unit’s manufacturing capability from 150,000 to 200,000 autos yearly, together with constructing a second manufacturing unit in Georgia with a 400,000-vehicle manufacturing capability, to start working in 2024.
These metrics and objectives seem engaging, however at this level, they’re principally hypothesis. Rivian has 71,000 pre-orders for its R1T pickup truck, nevertheless it solely has a tiny handful of autos truly on the street. Going from producing 11 autos in 1 / 4 to, theoretically, 150,000 per quarter (primarily based on Rivian’s manufacturing unit estimates) in simply three years is a steep problem even with round $20 billion accessible to fund it. Whereas the sum is sort of two-thirds of the quantity automotive large Ford (NYSE:F) is spending by itself EV manufacturing, the Blue Oval has been a longtime automaker for over a century, giving it deep ranges of data on mass manufacturing and immense sources of equipment, technical employees, and title recognition amongst shoppers across the globe.
Rivian may additionally have misplaced Ford’s technical help after the latter determined to “go it alone” on its EV program in November, canceling its joint EV manufacturing plans with Rivian. One other critical roadblock Rivian should overcome is the very completely different setting it faces as an EV start-up in comparison with Tesla a decade in the past.
The place Rivian’s street forks away from Tesla’s
Whereas Rivian’s present metrics look quite like Tesla’s early days apart from its huge valuation, it is not working in the identical setting. Although hybrid autos existed nicely earlier than it, and EVs had been tried, Tesla was a groundbreaking enterprise, the primary of its sort.
Rivian is working in a really completely different world. Tesla itself is now a dominating pressure with a market cap above $1 trillion, manufacturing round 1,000,000 very fashionable EVs per yr. Ford not too long ago stopped accepting reservations for its upcoming F-150 Lightning electrical pickup at 200,000 vehicles as a result of manufacturing could not sustain with demand. It is also constructing $30 billion price of EV and EV battery services by 2025 for a large manufacturing growth.
Chinese language EV producer Nio (NYSE:NIO) simply unveiled a mid-sized electrical sedan, the ET5, able to difficult the Tesla Mannequin S Plaid on vary and options, and it plans to broaden into 25 international locations over the subsequent few years. It is also now persistently constructing greater than 10,000 autos per thirty days. Nearly each main automaker on the earth is within the means of rolling out electrical autos, and there are numerous different devoted EV start-ups to take care of, too.
Briefly, whereas Rivian resembles early Tesla, Tesla was working with close-to-zero critical competitors, giving it far more leeway as a pioneer. Rivian, in contrast, is making an attempt to interrupt into an EV market already crowded with profitable rivals, who’re busy increasing manufacturing into the a whole bunch of 1000’s after which thousands and thousands, whereas Rivian continues to be making an attempt to get its first few autos bought.
On the plus facet, Rivian does at the very least produce working autos and has preorders for 71,000 R1T pickup trucks. Retail titan Amazon (NASDAQ:AMZN) is working with it to purchase a possible 100,000 supply vans. Truly producing these autos could possibly be an issue, nonetheless, contemplating that Ford could now not be a producing accomplice. In a current CNBC interview, Ford CEO Jim Farley stated Ford is contemplating selling its 12% stake in Rivian as soon as lock-up expires, gaining billions it could possibly return to shareholders or put money into its personal quickly accelerating EV push.
Purchase Rivian now, or await a decrease entry level?
Orders and sheer market enthusiasm for all EV shares are arguably the 2 most important elements holding Rivian’s share worth comparatively excessive proper now. However, in my view, the hurdles and dangers it faces in sustaining or rising this valuation are fairly excessive. The challenges of ramping up manufacturing (presumably with out Ford’s know-how and help), the quite a few highly effective rivals it faces, and the probability Ford will promote its Rivian stake, make me skeptical it should preserve its present inventory worth for much longer.
Rivian could turn out to be a viable electric car stock long-term, nevertheless it appears prone to shed a variety of its present hovering valuation within the meantime. This situation makes ready for a a lot decrease share worth as an entry level a method at the very least price contemplating.
This text represents the opinion of the author, who could disagree with the “official” advice place of a Motley Idiot premium advisory service. We’re motley! Questioning an investing thesis — even one in every of our personal — helps us all assume critically about investing and make choices that assist us turn out to be smarter, happier, and richer.
-- to www.fool.com ","author":{"@type":"Person","name":"EVdoesit","url":"https://www.onlineev.com/author/evdoesit/","sameAs":["https://www.onlineev.com","onlineev.com"]},"articleSection":["Tesla"],"image":{"@type":"ImageObject","url":"https://www.onlineev.com/wp-content/uploads/2021/12/two-rivian-r1t-pickups-scaled.jpg","width":2560,"height":1707},"publisher":{"@type":"Organization","name":"","url":"https://www.onlineev.com","logo":{"@type":"ImageObject","url":""},"sameAs":["https://twitter.com/onlineev"]}}
