Can Rivian Reach Profitability at 25,000 Vehicle Deliveries per Year?
Rivian is an American automotive and energy company that designs, manufactures, and sells electric vehicles. Rivian recently announced that they will deliver the first 75,000 orders by the end of 2024, with 25,000 being delivered in 2022. This has raised questions about whether or not Rivian can be profitable at such low sales figures.
Rivian’s production rate of 150 vehicles per day would mean 40,000 units produced in a year. If 10,000 of those are EDV (Electric Delivery Vehicle) for Amazon, then 30,000 units would be for the R1 series. This means that Rivian could potentially meet their goal of 75,000 deliveries by 2024. However, it is unlikely to be profitable due to many of the orders being at lower prices. Additionally, Rivian is expected to lose around $5 billion this year, meaning they would need to sell 500k units just to make up for that loss.
It is possible that Rivian is hoping some of the price protected preorders just go away instead of waiting. This could be why they have only been delivering to areas near service centers as it decreases warranty issue costs and minimizes mobile service and long distance rows.
The Inflation Reduction Act also provides a rebate for every Amazon Van built which could double their profit on those vans. This could explain why Rivian has pushed harder on supplying vans to Amazon than passenger cars to customers.
Overall, it is difficult to determine how profitable Rivian will be at these low sales figures. It is likely that they will need to rely on other sources of revenue in order to remain viable during their infancy stages. It remains to be seen if Rivian can meet their delivery goals and become profitable in the coming years.
Rivian has the potential to revolutionize the automotive industry and become a major player in the electric vehicle market. However, they will need to find ways to increase their sales figures and reduce their losses in order to be successful. It is possible that Rivian can reach profitability at 25,000 deliveries per year, but it is unlikely. They will need to continue to innovate and find new sources of revenue in order to remain competitive in the long run.
Can Rivian profit at just 25,000 deliveries per year?
Rivian is projected to fulfill 75,000 orders by the end of 2024, with 25,000 being delivered in 2022. This includes 10,000 Electric Delivery Vans (EDV) and 30,000 R1 series vehicles. At $10k per vehicle, they would need to sell 500k units just to make up for their estimated losses this year. They may be operationally profitable at lower volumes but it is difficult to determine without knowing their fixed costs. Additionally, the Inflation Reduction Act provides a rebate for every Amazon Van they build which could double their profits. Rivian is also exploring other revenue streams such as ride-sharing, subscription services, and autonomous driving. All of these could help them reach profitability at lower volumes.