At Bernstein’s 40th Annual Strategic Decisions Conference in New York, Rivian CEO RJ Scaringe provided a comprehensive update on the company’s progress, challenges, and plans. Here are the key highlights from his fireside chat:
Financial and Operational Updates
- Average Selling Price: The current average selling price of Rivian vehicles is approximately $90,000.
- Cost Reductions: Rivian has achieved significant cost reductions with suppliers—over 60%—and a 30% reduction in parts costs. The battery pack on the refreshed R1 model has been streamlined from 41 parts to just 16.
- Supplier Relations: Rivian has been able to work with suppliers to eliminate the “startup tax” and negotiate more preferential terms and pricing
Production and Delivery Insights
- Q2 2024 Forecast: RJ Scaringe candidly admitted that from an investor perspective, Q2 2024 will be challenging, with very few new vehicles expected to be delivered.
- Pricing Strategy: Despite the challenges, Rivian does not anticipate significant changes in vehicle pricing but aims to offer options that cater to a broad range of customers.
- Profitability: The R2 Tri-Motor variant is expected to be Rivian’s most profitable vehicle.
Market Positioning and Strategy
- Competitive Focus: Scaringe emphasized that Rivian is not aiming to compete directly with the Tesla Model Y, which dominates over 60% of the market share. Instead, Rivian is targeting the 92% of the market that has yet to switch to electric vehicles.
- European Market: Both the Rivian R2 and R3 have been designed with the European market in mind from the outset. While there are hints of a future European factory, it is not part of the short-term plan.
Customer and Infrastructure Development
- Adventure Network: The Rivian Adventure Network boasts a 98.5% uptime, a competitive edge in the electric vehicle charging space.
- NACS Adapters: There is currently a shortage of NACS adapters, but shipments have begun to address this issue.
- Charging Habits: Less than half of Rivian customers have used a DC Fast charger, indicating a preference for home charging solutions.
Production Commitments
- Electric Delivery Vehicles: Rivian has delivered 20% of the promised 100,000 Electric Delivery Vehicles (EDVs), showcasing progress toward their long-term commitments.
RJ Scaringe’s discussion provided valuable insights into Rivian’s strategic direction, operational efficiencies, and market positioning as the company navigates the complexities of scaling production and expanding its global footprint.
Shoutout to friend of the site @Hilbe for live-posting on Twitter/X and allowing me to source his posts.