Posted on 06/26/2024 1:04:23 PM PDT by Red Badger
Speculation has been swirling for months that Rivian (RIVN) needed a partner and a much needed cash infusion to keep operations alive. The EV startup put the rumors to bed late Tuesday, announcing a joint venture with Volkswagen (VWAGY), with plans for the global auto giant to invest $5 billion in Rivian.
Investors greeted the Rivian-Volkswagen partnership with excitement as RIVN shares skyrocketed more than 20% Wednesday morning, though off overnight gains of 50% or more. However, questions remain about Rivian's cash burn as attention turns to how Rivian and Volkswagen will execute its joint venture.
"We believe the opportunity ahead is significant," Rivian Chief Executive RJ Scaringe said Tuesday during an investor call.
"The joint venture is expected to develop a software-defined vehicle architecture capable of addressing all segments from entry-level vehicles to the most premium and high-performance vehicles," he added.
Deal A 'Game Changer' For Rivian? On Wednesday, Wedbush Securities analyst Dan Ives, who is a longtime Tesla (TSLA) bull, raised his price target on Rivian stock to 20 from 15, maintaining an outperform rating on the shares.
Ives wrote that the Volkswagen joint venture is a "game changer" for Rivian.
Ives said that "this is an exciting announcement for us to see." However, he added the focus remains on how Rivian can executive product execution, optimization and make inroads toward profitability.
(Excerpt) Read more at investors.com ...
ICE pick-up trucks are high margin vehicles.
Battery pick-up trucks have no pricing room for a profit margin.
A US company might be forced to sell one EV vehicle for 1 ICE vehicle.
The EV vehicle will then get exported to say the EU.
Kind of reminds me of the liberal talk radio scam.
Q: How can one make a small fortune investing in liberal talk radio?
A: Start with a large one.
big mistake for VW
Rivian is pursuing market segments that any business school grad understands are “late adopters”. Company cafeteria must be serving magic mushrooms.
Burning cash for a type of vehicle the public does not want, has no resale value, no junk yards will take them.
Burning cash to prove that a very early 20th century idea still does not work.
IMO there is almost nothing worse than a Volkswagen. Horribly unreliable and very expensive and tedious to repair. Terrible engineering.
Off the top of my head, BMW is way worse.
My opinion; ICE trucks are so darned expensive because they are configured to make up for the loss on EV pickups.
Too many start up companies trying to design, manufacture and market starting from scratch.
High volume, efficient production of high quality automobiles is a really, really hard to do.
And even if you are great at all of the above the lack of GM/Ford level of economies of scale will kill you in the market place.
Elon Musk is on record stating that setting up quality manufacturing of Teslas was the hardest thing he ever did - and he got a huge head start because he was pretty much handed over the old Numi plant in the Bay Area .
Numi was a state of the art joint venture between Toyota and GM for producing cost effective quality small and medium sized vehicles. Tesla is probably the only EV company that has enough industrial base, Product line, TRL level, market presence and distribution network to make it alone in today's market.
I guess if a company or individual owned a large number of shares, they'd be able to bail sell shares they hold.
VW’s last decent car was the ‘74 Kharmann Ghia, I wish that had mine back.
I was in the market for a new car lately. So, I read many vehicle reviews. One thing I learned early on was that I would not be buying a VW product.
EV may be (maybe) useful for small cars used for daily commuting.
Not what Rivian is making.
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