Rivian announces 1B gross loss and 600M revenue [pdf]

The financials may not look good right now, but the vehicles are <i>extremely</i> good. They’re already way out in front of the EV truck segment, and the big automakers have a huge gap to make up to reach the same level of quality. I wouldn’t be surprised if they manage to turn this around and become profitable.

&quot;We generated negative gross profit of $(1,000) million for the fourth quarter 2022. For fiscal year 2022, we generated negative gross profit of $(3,123) million. Gross profit for the fourth quarter 2022 was impacted by a lower of cost or net realizable value (“LCNRV”) of inventory charge and losses on firm purchase commitments of $920 million as of December 31, 2022 compared to $95 million as of December 31, 2021. We expect to continue to incur these charges throughout 2023 but anticipate the total charge will decline as we drive down cost of goods sold per vehicle by lowering material, production, logistics, and other costs. We forecast reaching positive gross profit in 2024 and therefore expect that by the end of 2024, we will no longer have material LCNRV inventory charges and losses on firm purchase commitments associated with our Normal facility.&quot;

I&#x27;m still pretty optimistic on Rivian.<p>Building an auto manufacturer from scratch is pretty up there as one of the hardest&#x2F;most expensive business challenge that exists. The fact that they have survived through the &quot;burning money&quot; stage to get to the other side at all is pretty powerful.<p>All the examples of car startups that failed only did so because they struggled to drum up sales in their day (DeLorean, Fiskar, Tucker, etc). On the other hand, I am seeing Rivians EVERYWHERE. They are selling them as fast as they can make them. On top of that, they seem to be doing a great job of releasing new models pretty quickly and skipping over the years of QC problems that plagued early Tesla.<p>If there&#x27;s actually consumer demand for the car, and the <i>marginal</i> costs to manufacture are favorable - you can probably ignore all of the sunk development costs. SOMEONE would want to carry on the business. But we will probably see all parties involved eating or writing off as much of the debt as possible right now that they are transitioning to cash flow.

How does this company — or any company, for that matter — continue operating in the long term with that much significant (i.e. 1B) gross loss?

“We make the Amazon delivery vehicles that Amazon gets at cost so we are a cost center that manages to offset our expenses by $600M further optimizing the weighted cost per delivery vehicle for Amazon.”

I think these look great, but I can&#x27;t see them replacing combustion engines for all the things people who drive trucks in the country need.<p>Like... I&#x27;m not going to load this up with fence posts and go out for a 12 hour day... plugging in the fence post digger to the battery... I&#x27;d be afraid that since I can&#x27;t just toss in an extra gas tank that I&#x27;d be walking home.<p>And I can&#x27;t see this pulling a horse trailer across the Great Plains stopping every 300 miles to recharge for several hours. (But I know North Dakota did finally get a Tesla charging stating!) Just feels like it&#x27;s not quite setup for &quot;real&quot; use.<p>I can totally see some suburban guy using this to go camping. But... even that, like I don&#x27;t want to leave this parked at the trail head for a week, when I&#x27;m hiking. I bet the battery would hold a week, but like what if it didn&#x27;t? I couldn&#x27;t just bum a jump from another camper.<p>One of the joys to being out in nature, is being away from &quot;it all&quot; -- including being away from the population density required to make charging stations viable. I think that&#x27;s always going to be a fundamental flaw with electric &quot;adventure&quot; vehicles.<p>Cool to look at. Promising tech. But EVs are still &quot;toys&quot; in my mind.

4th quarter consolidated balance sheet (in millions) so you don&#x27;t have to click through and look through it:<p>&gt; Revenue: 663 &gt; Cost of Revenues: 1,663 &gt; Gross Profit: (1,000)<p>Operating Expenses (Totals 795):<p>&gt; R&amp;D: 402 &gt; Selling, general, administrative: 393<p>Loss from Operations: (1,795)<p>Interest income: 99<p>Interest expense: 33<p>Other net income: 6<p>Loss before taxes: (1,723)<p>Remember, all of these are in millions. So Rivian managed to lose 1.7 billion dollars in 3 months. That comes out to nearly 19 million dollars lost every single day.

Financial experts: Do they break it down in a way that shows the COGS for each vehicle produced? Has that dropped a significant amount from a year ago?

The vehicles are so good. I hope they are able to get through this and become profitable.

Tesla is in big trouble...