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Southern_Smoke8967 t1_j9rwpu9 wrote

Reply to comment by aka0007 in Rivian Business Strategy Walkthrough - Do they have what it takes to compete against Tesla? by maliknyc

Tesla waited until 2018 to scale up for midel3 which is when negative FCF became big. Rivian on the other hand is scaling up from the get go which is why it has such as large cash burn. Same reason but different ramp up speeds.

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aka0007 t1_j9tb6tn wrote

Tesla in 2017 sold 2,685 Model 3's and their FCF that year was -4.1B. In 2018 they sold 152,977 Model 3's and their FCF that year was -221M.

RIVN in 2021 sold 920 r1t's and their FCF was -4.4B... So ah-ha! You must think you are right because look at how close that FCF is... But... through Q3' 2022 with 12,278 vehicles sold their FCF was another -4.7B.

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So to recap from Year 1 of production to Year 2 of production for the Model 3 vs the Truck/SUV Rivian makes:

Tesla 2,685 -> 152,977

Rivian 920 -> 12,278

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FCF for those periods:

Tesla -4.1B -> -221M

Rivian -4.4B -> -4.7B

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If you want to dig deeper into this...

In Q1' 2022 per vehicle sold, Rivian's FCF was -654K

In Q2' 2022 per vehicle sold, their FCF was -206K

In Q3' 2022 per vehicle sold, their FCF was -449K

Not sure scaling is working out here as you think.

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You can chirp on about how Rivian is doing this and that, but the numbers here don't show it. Tesla within a year turned around a cash-burning production process... Rivian has barely scaled up and as of Q3 was still burning cash like crazy. I would not count on next week Tuesday after the close looking pretty.

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