[legitster]

I'm still pretty optimistic on Rivian.

Building an auto manufacturer from scratch is pretty up there as one of the hardest/most expensive business challenge that exists. The fact that they have survived through the "burning money" stage to get to the other side at all is pretty powerful.

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.

If there's actually consumer demand for the car, and the marginal 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.

[rootusrootus]

It seems, though, like they are not at all through the 'burning money' stage. The marginal costs to manufacture appear to still be in the neighborhood of 3x the price of the vehicle. They seem optimistic they can turn that around this year, but promises are easy.

[legitster]

The cost per vehicle (all expenses total/ # of vehicles) may be 3x the sale price, but the marginal cost (the cost to produce one more car to sell) is still less than the sale price.

An important distinction. Otherwise selling cars would cost them money.

[rootusrootus]

COGS per vehicle is still way more than twice the average selling price. Yes, selling cars costs them money. They have to figure out how to make the manufacturing process use fewer and cheaper parts, less labor, etc. It is a difficult problem because scaling only offers incremental improvements to COGS.