Introduction to the Stone: Only by truly crossing the "capacity curse" that Tesla has experienced can Rivian truly prove himself, and it is obviously too early to talk about it as a "Tesla killer".
Li Ping | author
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Deliveries fell short of expectations, and Rivian shares fell to the bottom of their pockets
On January 11, U.S. electric pickup truck maker Rivian Automotive (RIVN.US) announced that by the end of 2021, the company had produced a total of 1,015 vehicles and delivered 920 vehicles, below its initial production target of 1,200 vehicles.
At the end of last year, Rivian said that due to supply chain problems, production is expected to be "a few hundred units less" than the target of 1,200 vehicles in 2021.
Despite the company's early sales warning, Rivian's stock price has fallen after the release of sales figures. On January 18, Rivian shares closed at $73.16, closing below the issue price ($78) for the first time.
In November last year, Rivian's stock price rose sharply after the listing of the "Tesla killer" halo, and the stock price rose as high as $179.47 after five trading days, and the market value exceeded the $150 billion mark, surpassing foreshadowing ford, General Motors, Daimler, Volkswagen and other auto giants to become the world's third largest car company (in terms of market capitalization).
But from doubling the share price to falling below the issue price, Rivian took only 2 months.
In addition to poor delivery data, Rivian's executive team also seems to be less stable. U.S. media reported that Rivian CHIEF Operating Officer Rod Copes has resigned. According to the data, Rod Cops has been holding the role of chief operating officer of Rivian since March 2020.
In addition, the market generally believes that Amazon's "empathy" has also dealt a heavy blow to Rivian.
One of the main reasons why Rivian, which has zero income and continues to lose a lot of money, is favored by investors is that it has received strong support from e-commerce giant Amazon. According to the data, as early as 2019, Amazon had announced that it had ordered 100,000 electric delivery vehicles from Rivian, and the first 10,000 vehicles would be delivered by the end of 2022.
In addition, Amazon is also an important financial backer of Rivian, and its first $700 million financing round in February 2019 came from Amazon. As of mid-2021, Rivian has raised $10.5 billion in financing, with Amazon participating in four of them, with a cumulative investment of more than $1.3 billion. After Rivian's listing, Amazon still holds 18.9% of its Class A shares and 17.3% of the shares, ranking the company's largest shareholder.
However, just when many people thought that Rivian would become Amazon's "spokesperson" for electric vehicles, the latter had a "scandal" with the world's fourth-largest automaker, Stellantis Group.
On January 5, Stellantis and Amazon announced a long-term partnership agreement with automotive software at its core. Under the agreement, Amazon will be the first commercial customer of Stellantis' Ram Promaster electric van.
In January 2021, peugeot-Citroen (PSA) merged with the fiat Chrysler Group (FCA) to form the Stellantis Group, which became the world's fourth-largest automotive group after Volkswagen, Toyota and Renault-Nissan. At present, Stellantis Group owns 15 brands such as Fiat, Jeep, Peugeot, Citroën and Maserati, covering ultra-luxury, luxury, mainstream passenger cars and even heavy-duty pickup trucks, SUVs and light commercial vehicles.
It is worth mentioning that Amazon has been a long-term customer of Stellantis, after which it purchased tens of thousands of Stellantis fuel trucks. It is believed that Stellantis will continue to cooperate with Amazon in the field of electric vehicles, and then compete directly with Rivian.
Amazon said in a statement after announcing its deal with Stellantis that it has been intent on working with multiple electric delivery truck suppliers. "We remain excited about our partnership with Rivian, which is not going to change our investments, partnerships, order sizes and timing."
In this way, Amazon has no intention of "abandoning" Rivian for the time being, which is not in the company's interest. In terms of return on investment, Amazon's investment in Rivian has achieved dozens of times the return. The fundamental reason why Rivian's stock price has been slashed may be that the valuation is too high.
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Why get a high valuation?
Founded in 2009 and headquartered in Elvin, California, Rivian' founder, Dr. RJ Scaringe, was a graduate of MIT's prestigious Sloan Automotive Laboratory.
In the United States, Scarlinch is as legendary as Musk. He has been a super fan since he was a child, helping his neighbors repair the Porsche 356s at a very young age, and also built his own car engine in middle school, and it was from then on that Scaringchi who germinated the idea of starting his own car brand.
After graduating with his Ph.D., Scarlinch decided to start his own business and found Mainstream. Similar to Tesla's car-making strategy, the early Rivian was committed to building high-performance sports cars, and began to transform into pure electric vehicle research and development in 2012. With a deep automotive professional background and rich experience in technical research, Scarlink has developed a feasible product route for Rivian, that is, to avoid the compact and medium-sized car markets where electrified products are already abundant, to cut from medium and large models with relatively blank markets, and to take the lead in mass production of pure electric pickup truck R1T.
In 2018, Rivian unveiled two electric models at the Los Angeles Auto Show, the pure electric pickup R1T and the pure electric SUV R1S, which attracted the attention of giants such as Amazon and Ford Motor.
After Amazon founder Jeff Bezos personally visited the company, Amazon led a $700 million investment in Rivian in February 2019. Two months later, Ford invested another $500 million in Rivian.
With the blessing of amazon and ford, the previously unknown Rivian began to gain fame in the American auto industry, which also allowed the company to obtain tens of billions of dollars in financing without delivering a car.
On September 14, 2021, Rivian's first mass-produced electric pickup truck, the R1T, officially rolled off the production line and began delivery two months later, making Rivian the first car company in the world to be able to mass-produce pure electric pickup trucks. Also in November 2021, Rivian officially landed on the NASDAQ and raised $11.934 billion, making it the largest IPO in 2021 and the sixth largest IPO in the history of the U.S. stock market.
The United States is sparsely populated, and pickup trucks can carry both passengers and goods, which is popular with American consumers, and its market size is larger and more profitable than traditional cars. The data shows that in the first half of 2021, the top three car sales in the United States - Ford F Series, Dodge Ram, Chevrolet Solod - without exception are pickup truck models.
Interestingly, although Tesla began accepting orders for the cybertronck, an electric pickup truck, as early as 2019, it has not been delivered so far. As of the end of last year, Tesla had a backlog of more than 1.2 million Cyberterucks, worth more than $80 billion.
According to people familiar with the matter, Tesla engineers have been modifying the size and exterior shape of the vehicle, and the production of the Cybertruck has been repeatedly delayed. Musk himself also confessed on his personal social platform: "Due to some characteristics, such as the new manufacturing process required for steel exoskeleton bodies, Cybertruck will face some serious challenges when it starts production." ”
All indications are that Tesla is facing the dilemma of not being able to build electric pickup trucks, which also shows the R&D and technical strength of Rivian, which is also an important reason why Rivian can intensively raise funds and set the largest IPO record next year without selling a car.
In addition to the laurel of the world's first pure electric pickup, the "skateboard chassis" is also one of the highlights of Rivian's research and development. Up to now, The three products that Rivian has announced (pure electric pickup truck R1T, pure electric SUV R1S and pure electric freight car EDV) have adopted the "skateboard" pure electric drive platform.
According to reports, this "skateboard chassis" will be the motor, battery management system, cooling system, suspension system, hydraulic control system all integrated into a complete module, located in the middle of the chassis, so that the skateboard chassis to achieve the full line control of the vehicle, so that the vehicle on and off the body decoupling, greatly shorten the research and development cycle, development costs are also reduced. In addition, the high degree of integration of the skateboard chassis also allows more space for the upper cabin, and can be adapted to a variety of different models, and the functions are also more powerful. For example, the four-motor version of the R1T can achieve tank steering (in-situ steering), bringing consumers a better driving experience.
Based on the optimism about Rivian, Morgan Stanley star analyst Adam Jonas believes that Rivian will break Tesla's dominance in the electric vehicle market, and Scarlinchi has the ability to surpass Musk in the future.
The founder halo, the blessing of giants such as Amazon and Ford, the market space of electric pickup trucks and the advocacy of star analysts have jointly promoted the soaring stock price of Rivian, and the name of "Tesla Killer" has become louder and louder.
But this madness lasted only 5 trading days.
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Bubble or strength?
In addition to lower than expected deliveries, Rivian's first post-IPO performance report was also unsatisfactory. According to the latest earnings report released on December 16, Rivian delivered 11 R1Ts in the third quarter, achieving a total revenue of $1 million, an operating loss of $776 million and a net loss of $1.233 billion. Previously, in 2019 and 2020, Rivian's full-year net loss was $1.02 billion and $994 million, respectively.
Obviously, from a financial point of view, Rivian, which currently has a market value of about $60 billion, is not an ideal investment target, which is also a fundamental reason for its stock price to fall endlessly.
Of course, Rivian's biggest attraction in the future is still the "Tesla killer". It is based on Tesla's growth logic that the secondary market judges that Rivian's early losses are not enough to be afraid, and its market value performance also directly crosses the climbing period of sales and directly benchmarks Tesla.
However, rivian will obviously take time to really challenge Tesla. On the one hand, although pickup truck products are favored in the United States, the global scope is far from being compared with mainstream passenger cars such as cars and SUVs, which is doomed to be difficult to sweep the global car market like Tesla.
On the other hand, even in the US domestic market, Rivian competitors are not only Tesla, but also face competition from Car companies such as Ford and GM.
The latest news shows that Ford Motor is about to deliver its pure electric pickup truck F150 Lightning on a large scale this spring, after disclosing that more than 150,000 new car booking orders have been made. Considering Rivian's limited short-term mass production capacity, F150 Lightning will enjoy a rare competitive "empty window" to establish a first-mover advantage.
In addition, GM's electric pickup truck Silverado has also recently opened reservations, which are expected to be released to the market in the fall of 2023. Considering Stellantis, which has previously "grabbed" The Rivian Amazon order, the Three Giants of Detroit have gathered in the electric pickup truck market.
More importantly, if Rivian wants to truly prove himself, he also needs to cross the "capacity hell" that Tesla has experienced before. Before the real god, every electric car of Tesla experienced a "production capacity hell" and could not deliver users on time.
According to the data, as of the end of October 2021, Rivian had 55,400 R1T and R1S orders in addition to 100,000 ED orders from Amazon. It is not difficult to see that Rivian is not short of orders, as long as the capacity problem is solved, it is not difficult to increase the delivery of new cars.
Rivian has a layout in terms of production capacity. In January 2016, Rivian acquired the former Mitsubishi Motors plant in Illinois for $16 million and converted it into a Normal plant to take control of its manufacturing capabilities. According to the plan, the Normal plant will have an annual production capacity of 150,000 units (by the end of 2023).
But capacity planning and actual delivery capacity are two concepts, which is a big reason why Tesla in the early days was always questioned and nearly broke. Tesla's previous leap through the "capacity hell" can not but say that there is a certain degree of accident, who can guarantee that Rivian will be able to get rid of this spell?
Rivian clearly has a long way to go to challenge Tesla. Perhaps only by truly overcoming the "capacity curse" that Tesla has experienced can Rivian truly prove himself, and it is obviously too early to talk about the "Tesla killer".