Will Rivian go BANKRUPT in 6 quarters?
"Current trajectory has them bankrupt in ~6 quarters. Maybe that trajectory will change, but so far it hasn’t."
Musk on X
Sometimes you have to wonder how good of a memory Mr Musk really has.
Recall early 2018, when Musk said Tesla was going through "Production Hell" ramping up Model 3 production and they were fast running out of cash? Musk even approached Apple about investing. So you'd think he'd know better than to judge situations like this. But, of course, we all know that Musk has no filter.
Despite this, Musk does have a point.
Rivian is about to lay off 10% of its workforce, obviously an attempt to preserve cash, and the new volume R2 isn't due to start production until 2026, which is when real revenue will start.
The problem is that if there really is only six quarters of cash left, then they'll run out Q3 2025.
So, Rivian will need to do two things urgently:
1) Control costs on R1 series so that Revenue > Cost on a per unit basis.
2) Ensure deadlines are not missed and that no cost overruns occur on R2 series vs budget.
It's hard to tell from this graph how much of this cash reduction is the result of Capex spend on R2, and how much is losses incurred from R1 production.
We also don't know if the majority of the capital expenses have been paid out on R2 yet or not.
Whatever happens, it's likely going to be tight, and they will need some things to go their way, just as Musk had, to pull through.
However, I like Rivian and RJ Scaringe a LOT, and really believe that they will pull it off.
Do you believe Rivian will pull through and make it happen? What do you think that they need to do?
Let me know in the comments below
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Organizing Businesses - Processes / Financial Planning / Project Portfolio Management / Business-IT-Alignment
1wHave to say that there is one thing that separates Rivian from other car makers: the community feeling and after sales care. Too bad we in Europe are still waiting for Rivian. The Volkswagen deal might mean if we will see the light at the end of the tunnel it will come at a (VW) price tag for Europeans unfortunately.