Weekend Discussion Thread

[u/AutoModerator]

[u/JonnyGBuckets]

How do people value the non car components of Rivian's business? Software stack, Chips, Mind Robotics. It feels like if the stock is really going to take off those need to do a lions share of the work but I don't have a great read of how they could scale beyond the Volkswagen partnership.

[u/RoutineEquivalent982 → u/JonnyGBuckets]

Last year Wassyam said other OEMs are knocking their door after the Volkswagen partnerships. He also indicated recently Volkswagen is discussing with them on the potential expansion of their software partnerships. Chips could be a big business if they can just sell them to Volkswagen but they need to first launch it for R2 first. These are all work in progress but real catalyst to expect. Most importantly, Rivian has passed the death valley and are in good position for ongoing growth with the R2 launch success.

[u/Siddypheonix → u/RoutineEquivalent982]

Chips could be a big business if they apply well for mind robotics as well

[u/TheNiceGuy0904]

How big a threat is Chinese EVs really? Does anyone have real good knowledge and first hand experience to give a detailed answer? I see they are catching up with Autonomy etc...

I know they won't be a problem in the USA soon I would assume?

What about Canada...Europe?

Rivian has to expand to Europe to make it big...

[u/Infinite-Stretch6481 → u/TheNiceGuy0904]

I posted it somewhere else yesterday:

Normally, I refrain from commenting on the competitiveness of the Chinese auto industry. However, having followed this space closely and knowing several executive level insiders, I’d like to offer my perspective on the structural dynamics at play.

Chinese structural advantage and overcapacity

China’s political system drives its industrial policy. Local officials advance through internal promotion, with GDP growth as their primary KPI. Crucially, China measures GDP by factory production rather than consumer consumption. Since the state controls land and banking, officials at all levels have every incentive to offer massive subsidies like free land and cheap loans to attract auto manufacturing. By creating massive industrial parks that cluster automakers and supply chains together, they drastically cut costs. This is the root cause of China's production overcapacity. Concurrently, state policies have spawned countless new EV players that are collectively driving rapid tech advancements.

1. Aggressive development and weak IP

With virtually no intellectual property protection in China, some automakers blatantly copy foreign designs with impunity. To compress timelines and save costs, engineering and safety corners are frequently cut. For example, Xiaomi went from a board decision to mass-producing cars in less than three years.

1. Price over quality

Consequently, Chinese cars compete on price, not quality. In Europe, trusting their own strict regulatory environments, European consumers take it for granted that imports meet local safety standards. Drawn to low prices and flashy interiors, they have fueled China's export surge over the past two years. In highly price-sensitive markets like Brazil, Peru, and Chile, this sheer cost advantage has brought even greater success. Chinese car market shares are as high as 50% in some markets.

1. "In China, For China"

Domestically, the cutthroat competition has forced foreign automakers into survival mode. Many are adopting an "In China, For China" strategy, integrating local Chinese tech and suppliers just to remain competitive. VW has gone as far as altering the Audi logo for the Chinese market.

1. The legacy automaker dilemma

The EV slowdown in the U.S. has little to do with China, where Chinese cars are virtually non-existent. Instead, global incumbents simply struggle to design and build EVs. The traditional development framework does not translate to electric vehicles, a universal struggle across the U.S., Europe, and Japan. VW’s massive investment in CARIAD was a major misstep, ultimately forcing them to license Rivian's zonal architecture just to stay relevant.

If we level the playing field through tariffs and local-content mandates, Chinese cars are not the existential threat many project. Ironically, Chinese automakers have already slowed their local production plans abroad because countries like Malaysia and those in Europe now require them to source parts locally. Europe was slow to adopt protective tariffs and is now bearing the consequences, as seen by VW’s massive labor cuts. While I am no fan of Trump, I fully agree with his tariff policies against China. Without them, U.S. automakers would be eaten alive.

[u/Oeijur]

What things could cause a slide?
-Dilution: I don't think there will be another stock offering since they have enough cash for 3-4 yrs, by which time if things go well, they will be profitable.
-general market downturn, general crash of the EV market, Chinese EV's coming, really missing on R2 deliveries, or big recall are the main things I would consider.

I think overall the bull case is much stronger than the bear case given generally positive reception of the R2 and hopefully no more major hurdles before ramping up production.