VW invests in Rivian

[dan_b]

Interesting.
We know VW has had, and continues to have, real problems with its EV Software architecture. Whereas Rivian's seems pretty darned solid. Wonder if that's got something to do with this deal?

https://electrek.co/2024/06/25/vw-will- ... t-gen-evs/

[Moxi]

Nice article Dan,

I would go so far as to say an indirect benefit (possibly a conscious consideration of VW's) could be that people previously put off the brand by the emissions and MPG scandal might be won back knowing that the chances of a repeat are somewhat reduced by dint of the software coming from a partner rather than "inhouse".

This is of course my personal opinion and based on my initial thoughts and reaction when reading this, I do love the look of the VW Buzz and the price wasn't too bad for some of the low milage second hand units when I looked but at the time I'm afraid I was put off by VW's recent history, reading this gives me hope for the future.

Moxi

[Mart]

The market has reacted extremely positively, with Rivian ($RIVN) up about 40% this week, though still down about 90% from their early highs.

The cash injection, and their recent upgrading (lowering production costs), really does, I think, give them a chance of surviving if they can become profitable soon. Currently I think their net losses (from investment, expansion and vehicle ramp up) reached about -$8bn, roughly twice the level that Tesla reached (~2019) before becoming profitable. But Rivian have now started to turn the tide.

So a long way to go, but a fighting chance now of making it.

[richbee]

It does seem that small companies really struggle with the scale of investment needed to create a profitable EV - Tesla struggled for a while, and would they have managed as well in the face of the incoming Chinese wave of cheap EVs?
Fingers crossed that it works out for Rivian and VW together - we need a good mix of available EV solutions, even if I can't personally imagine buying a massive EV pickup anytime soon

[dan_b]

I wonder if with the CyberTruck being such a polarising vehicle - and seemingly still not actually a complete product (even basic autopilot still doesn't yet work, and the charging curve still very slow, oh and that enormous windscreen wiper keeps failing) - and Ford failing to make the F150 Lighting in sufficient numbers to make it profitable that Rivian has a decent chance at the US Truck market? Which as we know, is where the big sales are in the US at least

[Mart]

Hi Dan, it may be too late for Rivian to capitalise on the US BEV pickup market, as Tesla is now at, or beating their production numbers when we enter Q3. Cybertruck production is now (apparently) at ~1,000 per week (with some weeks reported at ~1,300), and should grow to ~2,500 per week by end of year, 5,000/week next year. Rivian is at about ~1,000/week.

Good news for Rivian, is that they hope to start making a gross profit on their sales by end of 2024. So sales income exceeding cost of goods sold, an OPEX profit, though not a net profit when including CAPEX too. But a big step forward, and a lot more promising for the future for them.

Tesla supposedly releasing an OTA now to boost the Cybertruck's charging rate beyond 250kW. But giant wiper still a pig, with a recall to change some motor components.

[Paul_F]

Hi Dan, it may be too late for Rivian to capitalise on the US BEV pickup market, as Tesla is now at, or beating their production numbers when we enter Q3. Cybertruck production is now (apparently) at ~1,000 per week (with some weeks reported at ~1,300), and should grow to ~2,500 per week by end of year, 5,000/week next year. Rivian is at about ~1,000/week.

The US truck market is approximately 250,000 sales per week, so there's still plenty for everyone at this point.

One interesting question on the Rivian deal that I haven't seen mentioned yet - VW has licensed the MEB platform to other companies, notably Ford. Rivian has two vehicles in the right segment for it coming up (R2 and R3) which seem to be immature enough that they could be adapted to the MEB platform. Could this be another part of the deal? If so it would be a massive boost to Rivian quite apart from the cash injection.