The economic miracle of the Electric Vehicle
WestlinnDuck
Member Posts: 13,906
Toss in that Apple just dropped its EV program after burning through $10 billion. So, the incredibly stupid RINO governor of Georgia decided that he would be the lender of last resort for Rivian because they couldn't get the financing from the free market capital markets. So, based on a solid analysis of unicorn farts and a survey of all potential pickup truck owners on their pickup needs including price, Kemp decided to pony up $1.5 billion of taxpayer money because apparently all investment opportunities in Solyndra were taken.
THE MORNING RANT: Rivian’s Trajectory Has Hit Its ‘Gradually, Then Suddenly’ Moment; Other EV Follies and Failures
—Buck Throckmorton
Well, I didn’t plan to do another EV roundup so soon, but the collapse of everything EV - other than Tesla’s boutique niche - has accelerated since my last roundup a couple weeks ago.
Above all else, Gov. Brian Kemp’s billion-dollar taxpayer boondoggle in Georgia has apparently hit its ”gradually, then suddenly” moment. I’ve been discussing Rivian’s hype and struggles for a couple years. The excuse of “supply chain issues” can no longer mask the consumer rejection and failed business plan of Rivian.
As I’ve written about previously, Gov. Kemp (R) committed $1.5 billion of Georgia taxpayer money in 2021 to persuade Rivian to build a plant east of Atlanta that would allegedly create 7,500 new jobs and manufacture up to 400,000 EVs per year. Construction on the plant was supposed to commence in 2023, but it has been pushed back and has still not begun. The state, however, has spent a great deal of taxpayer money doing grading and roadwork for this plant that almost certainly won’t be built.
The most recent news from Rivian has been horrific.
The failing EV manufacturer lost another $5.4 billion in 2023, including $1.5 billion in just the 4th quarter. That comes out to a loss per unit sold of $108k on both an annual and quarterly basis. Rivian is reporting a lower “gross” loss of $43k per vehicle, which doesn’t include all the overhead expenses that are also consuming its cash, but that is even worse because it means that there is no sales volume for Rivian that is profitable, and that each incremental sale means another $43k of cash gets burned.
Rivian is now slashing employment, which is not what a company in growth mode does.
It’s interesting that the headlines are parroting Rivian’s announcement that its Q4 loss “narrowed” to $1.52 billion, when the loss actually increased from a $1.37 billion loss in Q3. The “narrowing” is compared to the loss in Q4 of the prior-year.
Electric vehicle startup Rivian Automotive reported a fourth-quarter net loss of $1.52 billion compared with a $1.72 billion loss in the same quarter a year earlier.
Rivian said it doesn't expect production to increase significantly this year compared with last year. Rivian also said it is cutting staff. “Today, Rivian also announced it is reducing its salaried workforce by approximately 10 percent,” the company said.
Rivian’s existing plant in Normal, IL has a manufacturing capacity of 150k units per year, but it manufactured just 57k vehicles in 2023, which was 7k more than there was demand for, since it only delivered 50k EVs.
The company was expected to produce 81,700 vehicles in 2024, according to eight analysts polled by Visible Alpha, Reuters said. Rivian produced 57,232 vehicles last year.
At these sales and manufacturing volumes, there is zero need for a new factory in Georgia. Of course, at these sales volumes and losses per unit, there won’t be a going concern named Rivian that could even occupy a factory in Georgia.
Cash and cash equivalents at the end of the September quarter were $7.94 billion, compared with $9.26 billion in the preceding three-month period.
$7.9 billion won’t go far when you’re losing $5.4 billion per year. Unsurprisingly, Rivian’s stock price is hitting all time lows. It has plunged 91% since Rivian’s IPO in 2021.
Elon Musk is helpfully offering his thoughts on Rivian’s death spiral…
There is a lot of chatter about Rivian needing to be acquired by Tesla or a legacy automaker before it goes bankrupt, but Tesla doesn’t need a money-losing EV line, and GM and Ford are already proficient at losing money on EVs without Rivian in their stable of marques.
*****
Ford Has Stopped Shipments of its Slow Selling EV Pickup Truck
Meanwhile, with Ford’s F150 Conflagration Lightning electric pickup trucks gathering dust at dealerships and piling up on storage lots all over Michigan, Ford has suddenly announced a suspension of new shipments of its unwanted EV. Automotive journalists have been peppering Ford with questions as to why this is happening. The answers have been either vague or humorous.
“Headlight issues.” Uh huh. I believe that Ford’s failed Edsel venture was also due to “headlight issues.” Likewise, when Ford killed off the Mercury brand a few years ago it was due to “headlight issues.”
Comments
Headlight issues? They wouldn't work after 50 miles because the piece shits battery was dead as a doornail!
Obviously the LED headlights on a Ford 150 EV are much different than LED headlights on a Ford 150 ICE pickup.
I see Rivian is borrowing the @HHusky approach of less inflationary quarterly growth compared to last year’s growth means inflation is decreasing. That logic works on morons, which is why H buys it and uses it. Only in Rivian’s case, it’s operating losses year-to-year being proclaimed as a victory. “We lost less than last year at this time!”
there is a Rivian dealership in Uvillage near the Tesla location. The four door SUV is pretty slick but EV’s suck. Hybrid cars are fine. I will take gas all day long. Drill baby drill. The left literally has ruined everything.
Rivian currently loses over $100k on each vehicle sold.
But they make it up on volume.