Rivian hit with wave of layoffs amid serious cost concerns
Rivian R1T Source: Rivian
Rivian is laying off 6% of its workforce as it is having issues cutting costs amid its production ramp – resulting in selling its electric vehicles at a massive loss.
While Rivian has been successfully ramping up production of its R1T and R1S electric vehicles over the last year, it hasn’t been able to reduce costs, and it’s becoming a real concern.
The company is not releasing its earnings until February 28, but it has already disclosed that it managed to ramp up production to 10,000 units in Q4 2022.
But the problem is that Rivian is losing a lot of money on every single one of those vehicles.
In Q3, the company was spending as much as three times what it charged per vehicle, and that’s before all the money it is spending to build out its service, sales, and charging infrastructure to support its growing fleet.
This is obviously not a financially sustainable business, and while investors are not too worried because Rivian still had $13 billion in the bank at the end of Q3, we need to see some improvements on the cost front.
In order to help cut costs, CEO R.J. Scaringe announced in an email to employees today that Rivian is laying off 6% of the workforce.
We contacted Rivian about the email that is circulating, and we will update the article if the company decides to comment.
Electrek’s Take
I have been warning for a while that there are serious concerns about Rivian’s costs, but a lot of Rivian fans have been minimizing those concerns because of the huge cash position.
Sure, the cash position is nice, but we need to see some serious improvements in the gross margins. Otherwise, Rivian is just losing more money as it increases production, which has been the case so far.
As of the last report (Q3), Rivian brought in just over $500 million in revenue from selling a few thousand EVs, which is great, but it cost them almost $1.5 billion to build those EVs.
Meanwhile, it is also spending nearly $1 billion a quarter in operating costs, which is to be expected as it expands its operations and infrastructure to support this growing fleet.
I don’t mind that too much, but we need to see a clear path to a positive gross margin on the vehicles, and so far, there isn’t one.
Without a meaningful improvement, Q4 is going to be a bloodbath with more vehicles produced.
Rivian has a great product, but if it can’t figure out how to make it profitable, it doesn’t have a great business.
FTC: We use income earning auto affiliate links. More.
Environment
Tesla hires celebrity ambassador despite Elon Musk saying they don’t pay for endorsements
Tesla has hired a celebrity ambassador, a departure from Elon Musk’s policy of not paying for celebrity endorsements.
Musk has often bragged about the fact that Tesla doesn’t pay for celebrity endorsements in contrast to other automakers who hire celebrity brand ambassadors to promote their cars.
Much like advertising, Musk seems to be abandoning this strategy.
Tesla announced that it hired Olympic shooter Kim Ye-ji, whose performance at the Paris Olympics this summer went viral, to be the automaker’s brand ambassador in Korea.
Kim said about her new partnership with Tesla:
I’m very excited to work with Tesla, who have recognized me. I hope to convey a positive message together with Tesla.”
Here are a few pictures released to announce her new partnership with Tesla:
Kim’s agency said that her relationship with Tesla started from CEO Elon Musk tweeting about her viral performance at the Olympics:
“The relationship between Kim Ye-ji and Tesla developed after Elon Musk mentioned her. The company said that Kim is Tesla Korea’s first brand ambassador.”
She is not only Tesla Korea’s first ambassador, but she is the first known paid celebrity ambassador for Tesla globally.
The policy change is not entirely surprising since the policy of Musk not paying celebrities to endorse Tesla’s products was often attached to the automaker’s strategy not to advertise.
Musk went as far as to say that he “hates advertising,” and Tesla started advertising last year.
The change in strategy coincidently, or not, came after Musk bought Twitter, a company relying on advertising, and Tesla even started to advertise on Twitter, now called X.
Tesla sales in Korea haven’t been amazing, but the country’s auto market greatly favors domestic brands. The American automaker does fairly well for a foreign brand with the Model Y becoming the best-selling imported vehicle in Korea during the first half of 2024.
Although, it amounted to just over 10,000 units.
Electrek’s Take
It’s a change of strategy, and Elon certainly can’t claim that Tesla doesn’t pay for celebrities to endorse its products, but it is probably a smart move due to the fact that Koreans prefer domestic brands.
Kim could help create a deeper level of attachment to the Tesla brand, but I don’t really know. I’m just speculating.
FTC: We use income earning auto affiliate links. More.
Kia just broke its October sales record as its impressive US sales run continues. After another record-breaking month, Kia said the growth is fueled by “strong demand” for its electric vehicles.
Kia sets new October sales record in the US
Kia sold 69,908 vehicles in the US last month, up 16% from its previous October sales record in 2023.
According to Kia, higher demand for its electric models is charging up sales in the US. Kia’s electrified sales (EVs, PHEVs, and HEVs) reached its highest ever in October.
All-electric vehicles (EVs) led the way, with sales surging 70% year-over-year (YOY). Plug-in hybrid (PHEV) and hybrid (HEV) sales were up 65% and 49%, respectively, from October 2023.
Kia’s first dedicated electric model, the EV6, set a new October sales record with 1,941 units sold. Through the first ten months of 2024, Kia has now sold over 17,700 EV6 models in the US. Meanwhile, its first three-row electric SUV, the EV9, continues to defy expectations.
With another 1,941 models sold last month, Kia EV9 sales reached 17,911 through October. That’s even more than the EV6 despite costing +$12,000 more.
Kia’s first US-made EV9 rolled out of its West Point, GA plant this summer. Although the EV9 is expected to qualify for the full $7,500 federal tax credit next year, Kia is matching it for now through incentives.
Next year, we will also finally see the EV9 GT, which Kia promises will have “enormous power.” Ahead of its official debut, we got our first look at the sporty electric SUV with an active spoiler last month.
| 2025 Kia EV9 Trim | Starting Price* |
| Light Standard Range | $54,900 |
| Light Long Range | $59,900 |
| Wind | $63,900 |
| Land | $69,900 |
| GT-Line | $73,900 |
Earlier this month, we learned that the 2025 EV9 will start at $54,900 (not including the destination fee), which is only $700 more than the 2024 model.
With prices dropping to potentially under $50,000, Kia’s three-row electric SUV is a steal. If you’re ready to experience the EV9 for yourself, we can help you get started. You can use our links below to view deals on Kia’s electric vehicles in your area.
FTC: We use income earning auto affiliate links. More.
The outcome of the U.S. presidential election on Nov. 5 won’t affect oil production levels in the short- to medium term, Exxon CEO Darren Woods told CNBC on Friday.
Former President Donald Trump has called for unconstrained oil and gas production to lower energy prices and fight inflation, boiling his energy policy down to three words on the campaign trail: “Drill, baby, drill.”
“I’m not sure how drill, baby, drill translates into policy,” Woods told CNBC’s “Squawk Box” Friday after the largest U.S. oil and gas company reported third-quarter results.
Woods said U.S. shale production does not face constraints from “external restrictions.” The U.S. has produced record amounts of oil and gas during the Biden administration.
Over the past six years, the U.S. has produced more crude oil than any other nation in history, including Saudi Arabia and Russia, according to the Energy Information Administration.
Output in the U.S. is driven by the oil and gas industry deploying technology and investment to generate shareholder returns based on the break-even cost of production, the CEO said.
“Certainly we wouldn’t see a change based on a political change but more on an economic environment,” Woods said. “I don’t think there’s anybody out there that’s developing a business strategy to respond to a political agenda,” he said.
While shale production has not faced constraints on developing new acreage, there are resources in areas like the Gulf of Mexico that have not opened up due to federal permitting, the CEO said.
“That could, for the longer term, open up potential sources of supply,” Wood said. In the short- to medium term, however, unconventional shale resources are available and it’s just a matter of developing them based on market dynamics, he said.
Exxon Mobil shares in 2024.
The vast majority of shale resources in the U.S. are on private land and regulated at the state level, according to an August note from Morgan Stanley. About 25% of oil and 10% of natural gas is produced on federal land and waters subject to permitting, according to Morgan Stanley.
Vice President Kamala Harris opposed fracking during her bid for the 2020 Democratic presidential nomination. She has since reversed that position in an effort to shore up support in the crucial swing state of Pennsylvania, where the natural gas industry is important for the state’s economy.
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports7 months agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Environment1 year agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Sports3 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business2 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway