Elon Musk Was Right About Rivian | Going Out Of Business?!

and unless something changes significantly with

rivian

and Lucid, they will both go bankrupt, they are on the trail of bankruptcy. Rivian is in big trouble and it looks like they are on their way to

going

out of

business

. In a recent interview, Tesla CEO Elon Musk shared his thoughts on the company and explained why they are on the brink of bankruptcy. Elon Musk is a polarizing individual. but he's one of the most successful entrepreneurs of Our Generation he's the richest person on the planet with an estimated net worth of $200 billion Rivian decided to go head to head with the tech billionaire and they seem to be failing miserably join us as we explain what Elon Musk has said and the reason why it seems to be correct before

going

into details, it is important to know how difficult it is to execute.

A successful car company of all American car companies, only Tesla and Ford have reached production scale and have not gone bankrupt. The problem is that the automotive industry is a low-margin

business

and it is very difficult to achieve economies of scale; It is also a very competitive industry. With headlines entrenched, Tesla has been on the brink of bankruptcy on several occasions, including in 2008, on Christmas Eve, Elon said in a tweet that Tesla's financing closed at 6 p.m. on Christmas Eve, the last hour of the last day, otherwise the possible payroll would have bounced two days after Christmas.

Elon Musk understands how difficult it is for a new company to survive and is warned that he is a strong defender of freedom of speech and says what he thinks without worrying about what others think. Earlier this year, he threw some shade at Rivian and Lucid Motors by telling Silicon Valley Tesla owners at the Texas gigafactory that competing electric vehicle companies will fail unless something changes significantly. His comments came at a time when Tesla stock was struggling, especially since the announcement of the $44 billion Twitter deal, in Elon Musk's words, the only auto companies in the US. have gone bankrupt are Tesla and Ford, unless something changes significantly with Rivian and Lucid, they will both go bankrupt, Musk added.

I hope they can do something, but unless they can reduce costs dramatically they are in serious trouble and will end up in the Auto Graveyard like everyone else with the exception of Tesla and Ford, my advice to rivien would be to reduce costs immediately and dramatic in all areas or they will be doomed. Additionally, he highlighted Rivian's decision to raise the price of its electric vehicles earlier this year, noting that doing so dramatically reduces the number of people who can buy Rivian vehicles. Rivian has significant negative gross margins and lost $1.5 billion in the year. first quarter of this year continues on this path of losing money with every Eevee it produces it is easy to predict bankruptcy Lucid is in However, in a similar situation it was where you would expect Rivian and Lucid to be in their evolution stage and Tesla was in a very similar situation at approximately the same time before controlling your costs.

Tesla was in the red and dependent on the search. additional funds over a long period, virivion, the main difference is that they are doing it on a larger scale than Tesla, even when it was still losing money overall. Tesla had managed to generate a positive gross margin on its vehicles when it began shipping. thousands of them every quarter, Rivian was still losing money on every vehicle it delivered, but again, predicting Dooms suggests that Rivian can't cut costs by reducing production costs. The other difference is that Rivian could cover these losses as it had over $16 billion in cash on hand at the end of that quarter to Musk's point, although it is on a downward trajectory and needs to be reviewed, but again Tesla was in A similar situation, so there is certainly still time now, just a few months later, it seems that Elon Musk's predictions are coming true in the third quarter of 2022.

Rivian reported revenue of $536 million, below expectations Wall Street of about 550 million. As Rivian builds out its production capabilities, the emphasis will likely be on the company's operating expenses and debt management strategy, although revenue is crucial, the most important figure to watch here came when Rivian reported a loss of $917 million in gross profits for the third quarter, which is almost $1 billion. Rivian notes that as we produce vehicles at low volumes on production lines designed for higher volumes, it has and will continue to experience negative gross profits related to labor depreciation and overhead costs and operating expenses for Rivian increased from $694 million in the third quarter of 2021 to 857 million in the third quarter of 2022.

Interestingly, the increase is mainly due to an increase in share-based compensation expenses compared to a loss of 776 million in the previous year, rivien reported a loss net of almost 1.7 billion overall; the largest loss is a result of increased input costs related to the expansion of manufacturing capacity; however, despite a significant capital burn of more than 1.6 billion in the third quarter. Rivien completed the quarter with 13.8 billion in adequate cash. Even with all this, the automaker stated that the company is on track to reach its annual production goal of 25,000 vehicles in 2022, for a total of 15,000. Vehicles including the automaker's SUV truck and Amazon delivery vans through September 30.

Rivien said its production in the third quarter increased 67 percent from the same period a year earlier. The addition of a second shift at the company's Illinois Normal factory helped it produce 7,363 vehicles during the quarter, with 6,584 of them delivered, a big increase from the 4,467 cars Rivian shipped during the second quarter of the year. Rivian has had a difficult year fighting alongside other automakers and, in particular, other startups. In July, founder and CEO RJ Scaringe was forced to lay off six percent. of the company's roughly 900-strong workforce, Rivian also had to recall nearly all of its vehicles in October to fix a steering issue as the company prepares for long-term supply chain constraints. supply in its battery supply chain, he said from the TechCrunch disruption conference stage. that the current shortage of semiconductor chips in the industry is an appetizer of the degree of supply chain tightening we are likely to see across the battery supply chain over the next 15 years; however, demand for Ravines Vehicles remains strong with more than 114,000 pre-orders in the United States.

United States and Canada, this is in addition to Amazon's initial order for one hundred thousand electric vans. Rivien is doing much better than many of its EV startups, such as Canoe and Faraday Future Intelligent Electric, neither of which have produced a single vehicle so far. However, Rivien has not proven that it is the next Tesla. If Rivien plays its cards

right

by the end of 2030, it could be almost as big as Tesla is today, but it's still a very high-risk investment to launch its next-generation R2EV platform in 2026. a collaboration with Mercedes-Benz to producing electric vans on a large scale and the appointment of former Waymo and Zuke executive James Philbin to lead Rivian's efforts in AI and automated driving technology are just some of the areas where Rivian sees growth potential across the board. sizes of electric vehicle manufacturers. are under pressure due to upcoming economic challenges, a rival, a British electric vehicle startup that restructured its operations in response to a funding shortage and shifted to developing commercial vans for North America instead of Europe, recently said it would not expect to see no income. until 2023.

Similarly, Lucid Motors has just revealed a net loss of 530 million in the third quarter with revenues of 195 and a half million dollars from an initial target of 20,000 vehicles. The startup announced that it is on track to produce between six thousand and seven thousand of its Lucids. aerial premium sedans in 2022. Tesla's third-quarter revenue nearly doubled to $3.3 billion from the same period a year earlier, but the company said supply issues continue to hamper production. Tesla's record revenue of 21.45 billion for the quarter also fell short of experts' projections. Rivian remains optimistic and I too have some things going for them, but they may ultimately need to listen to Elon Musk if they want to stay in business.

What do you think Elon Musk is

right

? Let us know in the comments section. Thank you so much. For watching today, we really appreciate you leaving a like and considering subscribing to always be up to date with the latest EV and technology news.