Rivian Update -- Current Quarter Losses -- Sales Will Be Slightly Lower Than Expected -- October 6, 2023

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Updates

For the week ending October 6, 2023:

Original Post 

What's Rivian doing today?

Down another 2.6%.

Link here.

Market cap: about $20 billion before the "convertible bond" announcement.

Convertible bond announcement? $1.5 billion. 

1.5 / 20 = 7.5%.

I think this is the bigger story: "...sales in the current quarter will be slightly lower than expected. We're looking at a loss of just about 13%."

Very high gasoline prices should result in higher sales, so what's going on?

Interest rates are "killing" big ticket items. Especially cars. Perhaps homes / houses not quite as much.

For EV enthusiasts / investors / speculators, a must-read article.

First question: why would it be significantly different for other EV manufactures at same point on the time line, like Ford and GM. 

From the linked article:

Once seen as the most credible competitors to Tesla Inc., Lucid and Rivian entered public markets in mid-to-late 2021, when market enthusiasm for new EV-makers were high. Their valuations soared before the tables rapidly turned in 2022 as traders veered from riskier growth investments. Lucid is down 91% from its peak, while Rivian has lost 89%.

Severe supply-chain shortages and surging prices of battery raw materials plagued them further, but troubles have stuck with Lucid this year. The company has struggled to ramp up sales, selling around 1,400 units in both the first and second quarter. For the third quarter, it is estimated to have sold about 2,100 cars. Rivian’s sales, on the other hand, have grown significantly every quarter so far this year.

The risk that Lucid may default on its debt payments is also climbing. According to Bloomberg Intelligence credit analyst Joel Levington, the company’s default risk is now at 16%, almost four times the median for global automotive manufacturers. “Lucid’s near-term strength is its cash balance of $5.2 billion, but its cash burn of almost $7 billion through 2024 tempers views,” Levington wrote in a note on Wednesday.

At the same time, the firm is trying to find a foothold in a market where Tesla already rules. The company makes a luxury electric sedan that competes with Tesla’s Model S, along with several new models rolled out by more established global carmakers such as Mercedes-Benz Group AG, BMW AG, and Volkswagen AG’s Porsche and Audi brands.

“The problem lies with how Lucid positioned itself — going after a luxury, smaller volume market, while Rivian is targeting a bigger addressable market,” said Tom Narayan, an analyst with RBC Capital Markets. That said, Narayan noted that “Rivian isn’t out of the woods either, though it is now in a better place compared to Lucid.”

Meanwhile, GOEV fell 6% today.