Elon Musk says that Lucid and Rivian are tracking toward bankruptcy...

[Drendino]

Maybe it’s a fantasy, but if Lucid fails and the stock price plunges further, Apple may have no choice but to buy Lucid. Personally, I think Lucid will succeed, but it may take a change in management. Wall Street hates over paid CEOs who habitually under perform, regardless of the British accent.

I think Rivian is more of a basket case. If ford and Amazon keep dumping more stock, I wouldn’t be surprised to see GM swoop in for a take over.

 

[HC_79]

I think Rivian is more of a basket case. If ford and Amazon keep dumping more stock, I wouldn’t be surprised to see GM swoop in for a take over

Rivian is interesting as I have no idea how they can price a car at that price point with such a large battery in it. They’re not vertically integrated, so heavily reliant on suppliers and cost increases from them alone. Even with the price hike I still can’t see how they’ll ever make money on it.

It’s got a lot of hype and the constant reviews etc are praising it. Everyone wants one but will be interesting to keep an eye on the losses each quarter as something isn’t right with the price.

 

[Bunnylebowski]

Rivian is interesting as I have no idea how they can price a car at that price point with such a large battery in it.

It’s got a lot of hype and the constant reviews etc are praising it. Everyone wants one

I was picking up my wife‘s Subaru from service and the dealership owner came out and chatted with me about the Lucid, said his lawyer just got one and loves it. The dealer just bought a Rivian R1T at auction for $130k because he didn’t want to wait for the R1S he’d reserved cuz they told him he wouldn’t get it until 2024 now, so yeah, the demand certainly is there. His is green, looks awesome. I don’t think build quality will be a problem for Lucid, as my wife’s 3 year old Subaru needs the control arm, brake booster and master cylinder replaced, and they’re probably gonna make the brake booster a recall for 2019 model years, right now it’s just a service bulletin. Plenty of ICE makers reliability are no better than lucid, I’m not worried about Lucid figuring out how to build a car.

It’s easy in this shitty economic climate to project doom and gloom but unless supply chain problems become permanent or Lucids start catching on fire, the brand isn’t going anywhere. This thing turns heads like no other car, my wife is actually annoyed by how many people want to talk to me about the car, we had a birthday party for my kid and everyone was more interested in my car than my kid hahaha. EV demand is skyrocketing, and while yeah the Lucid is expensive, those who can afford one outside of this forum seem very enthusiastic about the car as far as I can tell so the only real obstacle is production. The fact that management actually LISTENED to the service centers and halted production to make improvements is amazing, and I think is an encouraging sign that the company isn’t just doubling down on mistakes so they can get the numbers out the door (the Tesla model).

 

[Sandvinsd]

I agree that without the Saudi money, Lucid would probably be in serious trouble. They’re spending money on building a plant in Saudi Arabia while they can’t even get the existing plant issues resolved. I know a lot of the money is coming from the PIF and subsidies but how much is Lucid prioritizing to keep the Saudis happy vs focusing on getting production ramped up in the US. The AMP-1 expansion is ridiculous at this point in time. They can’t even get a few hundred cars out a quarter let alone the 30K+ the current line can build a year. Yet even before getting that line operational they throw money at expanding the plant to 90K+ cars a year when they can’t seem to get over 30K orders. The excuse for the expansion was for the Gravity but surprise, surprise that got pushed to 2024 so they’ll have this massive plant with very little orders coming in……

Management needs a good kick up the ass. These people are seasoned people from the industry and can’t get things moving. Supply chain constraints aside there have been QC issues from day 1 so again, what on earth were they doing during pre production? Maybe there is a reason these people aren’t at Audi, Tesla, etc. anymore because they couldn’t make the cut at those companies so thought they could do better elsewhere.

As an owner, a shareholder and wanting the company to succeed I’m becoming extremely frustrated with Lucids efforts to get things right. At this point in time, everyone is probably laughing at them and will never see them as a threat. They took a great platform and have potentially killed it because management just can’t get it right.

Elon is a troll but Lucid played right into his hand. Peter’s comments about doing it better and focusing on quality have bit him in the ass big time! Instead of owning up to the mess he’s created he stays quiet and does videos in his spare time on how good the car is.

I feel Lucid has a very small window to succeed and as each day goes by that window is closing. Q2 earnings are going to be brutal and all we’ll hear from Peter is “things are great” and have controlled questions for him to answer.

My exercise in futility (with the Saudis controlling the company) was voting no for all the directors at the shareholder meeting. It was my way of saying I’m not happy with the direction this past year.

I will be very curious to see the Q2 numbers, but they won’t be available until late August since Lucid waits until the last possible date to provide them. I’m sure they are hoping that everything is rolling by then so they can put a positive spin on them. However, because there will only be 4 months left in the year, they will have to give a ‘come to Jesus’ statement about the true state of production. Back in January I figured they would be confirming Touring orders by April or May based on the rate they were coming through the GT reservations. Unfortunately, although they know how to process the reservations, they don’t know how to convert them to a delivered car. Coming up on 8 months after the first GT orders were confirmed, they are still ‘in production.’ Not going to be good for the stock when those numbers are finally revealed.

 

[Bunnylebowski]

I’m no investing wizard, but given supply chain issues are screwing literally all manufacturers (Mercedes is delivering lower trim cars without electric seats, that’s right imagine your luxury car with handles and levers to adjust your seat, Porsche stopped Taycan production for longer than Lucid’s halt, Rivian R1S is probably 2024 now), how realistic is it to focus on quarterly output as a sign of company viability? Like if you miss your quarterly projections 4 times then you’re a shit company and you go bankrupt? I thought if one was investing in a business you were more focused on long term viability and fundamentals, and with the economy edging into recession, drowning inflation and rising interest rates, the LAST thing you want to hang your hat on is quarterly projections. Maybe because it’s EVs everyone is just looking for Tesla 2.0 which never adhered to market or business fundamentals anyway? That’s not realistic. I see no reason why $50-60 share for LCID in a couple years isn’t realistic, and at $16 right now well I’m gonna buy more.

 

[Sandvinsd]

Missing production due to supply chain issues is one thing. Missing targets because of quality issues is another. Lucid needs to get the quality narrative on track. They already made a VP change, but as another posted, their window is closing.

 

[joec]

I didn’t know we had so many auto manufacturer CEOs in this forum.

At this point, I can’t even get a new power brick for my MacBook Pro until August. Yes. August. And this is Apple. The operations and logistics king of the universe. Can’t get a plastic brick.

I haven’t had to wait this long for an Apple product since, well, before Tim Cook joined the company. When it was normal to wait months for just about any Apple product.

I think it’s fair to say the supply chain has not yet righted itself, as many had hoped it would by now.

Lucid will have a terrible quarter. So will everyone else.

At least Rawlinson didn’t just lose 500 million of the company’s money on Bitcoin in the last quarter.

 

[Parachute Adams]

I didn’t know we had so many auto manufacturer CEOs in this forum.

At this point, I can’t even get a new power brick for my MacBook Pro until August. Yes. August. And this is Apple. The operations and logistics king of the universe. Can’t get a plastic brick.

I haven’t had to wait this long for an Apple product since, well, before Tim Cook joined the company. When it was normal to wait months for just about any Apple product.

I think it’s fair to say the supply chain has not yet righted itself, as many had hoped it would by now.

Lucid will have a terrible quarter. So will everyone else.

At least Rawlinson didn’t just lose 500 million of the company’s money on Bitcoin in the last quarter.

And I didn't know you have to be an automotive CEO to express an opinion here about LCID operations....

BTW, its a big part of the CEO's responsibility to have accurate visibility into the supply chain---months out. The problems have been on the front pages for a year. They didn't just crop us the week after he reiterated the May guidance of 12-14,000 units in 2022.

 

[joec]

And I didn't know you have to be an automotive CEO to express an opinion here about LCID operations....

BTW, its a big part of the CEO's responsibility to have accurate visibility into the supply chain---months out. The problems have been on the front pages for a year. They didn't just crop us the week after he reiterated the May guidance of 12-14,000 units in 2022.

Rawlinson said, repeatedly, at the beginning of the year supply chain would be an issue for the first half of the year. Given it's June 15th, I'd say he's not wrong—yet.

Several other CEOs of other companies predicted this would start to ease by July as well. Clearly, conventional wisdom has been this would be behind us if not by now, then soon. If that doesn't happen, well, then sometimes things change between January and June, and you adjust accordingly.

Lucid's future is far from certain. But firing the CEO is not a great way to instill public confidence. Particularly when the company does seem to be, however slowly, making improvements to its processes.

 

[victoryroad]

Cogent and clear comments above. Much as Elon's bombastic statements put me off, the fact is that unless production and deliveries for Lucid can scale, they will not be able to keep burning cash at the current rate. My concern is that the SA support could evaporate and there appears to be little prospect for Lucid to raise capital in equity or debt markets before it can demonstrably meet its delivery estimates. A few billion dollars is walking around money for the prince, but we do not know the extent of his resolve with his Lucid investment. Orders on its books can be canceled even if customers may lose their deposits. Rawlinson's silence is a significant concern.

I continue to hang in with my order because the AGT is a brilliant engineering and design effort, notwithstanding its well-documented software and production quality control problems. I do not expect VIN assignment and/or delivery for several months at least so will monitor the long-term viability situation in the interim.

 

[HC_79]

firing the CEO is not a great way to instill public confidence.

I don't think Peter should be fired. His engineering expertise is solid and you can tell he loves it by watching the 2 videos they've produced. The issue I have with him is the narrative he spun about how they were going to do it better and repeatedly remain silent as production woes remain. From the QC, the communication issues, etc. someone has to take responsibility. He runs the company and how hard would it be to fess up and send an email out to everyone saying things haven't gone according to plan and what they're doing to fix with realistic timelines. Staying silent isn't a true leader, owning up to mistakes while also taking kudos when things go right comes with the job and I don't feel he's doing that.

As others have pointed out, orders for parts aren't done on a weekly basis they're planned months in advance so to just blame it all on supply chain constraints is a cop out. The software team certainly isn't impacted by supply chain constraints. The DA's being able to send an email with realistic timelines isn't impacted by supply chain constraints. There is a leadership problem and to just accept that it all comes down to supply chain constraints is ridiculous.

 

[Bunnylebowski]

As others have pointed out, orders for parts aren't done on a weekly basis they're planned months in advance so to just blame it all on supply chain constraints is a cop out.

But placing an order doesn’t guarantee delivery of what you’ve ordered when you need it. I think that’s the biggest supply chain problem. I work in medicine and we routinely are finding things we ordered WAY in advance now can’t be delivered and the backup we ordered just in case isn’t available either. And that’s for a hospital where cutting corners due to stock shortages can be litigated against. So I’m sure auto manufacturers are facing the same issue.

The software team certainly isn't impacted by supply chain constraints.

That is true.

The DA's being able to send an email with realistic timelines isn't impacted by supply chain constraints.

Couldn’t it be though? They give a timeline based on what they were told, then something goes wrong or a shipment didn’t arrive, or is defective (which already happened with the first Lucid recall). I totally agree it’s very frustrating and sucks but it seems there’s all these assumptions of management incompetence and failure and finger pointing and I’m not sure if that’s taking the messed up unique times in which we live into account. Can they do better? Absolutely. Do you think they don’t know that and aren’t trying to do better?

 

[joec]

I don't think Peter should be fired. His engineering expertise is solid and you can tell he loves it by watching the 2 videos they've produced. The issue I have with him is the narrative he spun about how they were going to do it better and repeatedly remain silent as production woes remain. From the QC, the communication issues, etc. someone has to take responsibility. He runs the company and how hard would it be to fess up and send an email out to everyone saying things haven't gone according to plan and what they're doing to fix with realistic timelines. Staying silent isn't a true leader, owning up to mistakes while also taking kudos when things go right comes with the job and I don't feel he's doing that.

As others have pointed out, orders for parts aren't done on a weekly basis they're planned months in advance so to just blame it all on supply chain constraints is a cop out. The software team certainly isn't impacted by supply chain constraints. The DA's being able to send an email with realistic timelines isn't impacted by supply chain constraints. There is a leadership problem and to just accept that it all comes down to supply chain constraints is ridiculous.

No, I wouldn't blame it all on supply constraints. You're right. That was just an earlier sentiment that had been expressed that I was continuing on. There's also the manufacturing processes, which were definitely flawed in a major way. But that seems to have been corrected by reassigning QA duties and revamping the entire process. Which, to your point, demonstrates good leadership in my book. Someone doesn't live up to their job description, they get taken out and someone else gets put on their portfolio.

Avoiding mistakes is great. Reacting to them and correcting them is the better skill. Because no one avoids them all.

Not hearing as many complaints about quality (other than software) in the latest batch of deliveries. So that's a good sign. I'm choosing to believe cars coming off the line from this point on will have far fewer warranty repairs needed.

Software has been a total mess, to be sure. I have a feeling the inside story on that one is a doozy. And it's too early to tell if they've made improvements there, honestly. The extent of the damage is pretty great. Still Lucid's biggest challenge as far as I am concerned. And probably their biggest failing thus far.

The software, as it stands, should not have shipped to customers. But weigh that against making all of your customers wait another entire year before getting their cars, and at some point, something has to give. I'm sure there was plenty of pressure to get cars out the door this year, and that decision wasn't easy. Personally, I think they made the wrong call, but who knows? Time will tell.

As far as writing a letter and fessing up to mistakes goes, they literally just did that. It wasn't Rawlinson, but it was Zak Edson, VP of sales. Given it was an apology about not delivering to customers, that seems like an appropriate person to say something.

I'm sure Rawlinson will have more to say on that topic on the next earnings call as well.

Did Rawlinson paint a slightly rosier than reality picture in January? Yeah. Does anyone honestly think it would have been better to say "Look, we've never done this before. We'll probably screw up the first thousand or two thousand cars royally. So be sure to get that preorder in."?

 

[digiboxer]

I don't think Peter should be fired. His engineering expertise is solid and you can tell he loves it by watching the 2 videos they've produced. The issue I have with him is the narrative he spun about how they were going to do it better and repeatedly remain silent as production woes remain. From the QC, the communication issues, etc. someone has to take responsibility. He runs the company and how hard would it be to fess up and send an email out to everyone saying things haven't gone according to plan and what they're doing to fix with realistic timelines. Staying silent isn't a true leader, owning up to mistakes while also taking kudos when things go right comes with the job and I don't feel he's doing that.

As others have pointed out, orders for parts aren't done on a weekly basis they're planned months in advance so to just blame it all on supply chain constraints is a cop out. The software team certainly isn't impacted by supply chain constraints. The DA's being able to send an email with realistic timelines isn't impacted by supply chain constraints. There is a leadership problem and to just accept that it all comes down to supply chain constraints is ridiculous.

I don't think he should be fired at this point. Obviously that's a matter for the board, and a big consideration is always who is the replacement? I have no idea what the board's sociology looks like: are they mostly Peter supporters? Do the Saudis dominate with their partisans, etc? A lot of the directors look like industry experts. It's time for them to step up and let management know they expect results, but also help in every way they can.

The scariest unknown for me in terms of shareholder value is whether there is enough demand for the product to support the business model

 

[LCIDdreams]

I’m no investing wizard, but given supply chain issues are screwing literally all manufacturers (Mercedes is delivering lower trim cars without electric seats, that’s right imagine your luxury car with handles and levers to adjust your seat, Porsche stopped Taycan production for longer than Lucid’s halt, Rivian R1S is probably 2024 now), how realistic is it to focus on quarterly output as a sign of company viability? Like if you miss your quarterly projections 4 times then you’re a shit company and you go bankrupt? I thought if one was investing in a business you were more focused on long term viability and fundamentals, and with the economy edging into recession, drowning inflation and rising interest rates, the LAST thing you want to hang your hat on is quarterly projections. Maybe because it’s EVs everyone is just looking for Tesla 2.0 which never adhered to market or business fundamentals anyway? That’s not realistic. I see no reason why $50-60 share for LCID in a couple years isn’t realistic, and at $16 right now well I’m gonna buy more.

I have long positions in both LCID and RIVN (that were fortunately bought at the lower ends of their trading ranges). Both companies still need to be able to demonstrate they are able to manufacture at scale and at a profit. I am obviously betting that they will be able to get to that point (within a few years…not a decade) but accept that it is certainly not a given.

RIVN has a product that is probably more mass-marketable at the moment (rugged looking lifestyley trucks/SUVs are en vogue) and massive cash stash to hopefully get them close to the point they are mass producing their R2 range (smaller, less expensive vehicles). I also question if they will make a profit on their R1 vehicles given the large batteries and complex widgets and features. LCID has valuable and distinguishable technology (+ vertical integration advantages) and I can’t see the Saudi’s not putting in more funding if that is what is needed to keep running until they reach manufacturing volumes that turn a profit (shareholder dilution becomes a concern).

Technically I think it’s accurate that both would likely go bankrupt if no further funding is secured in the future. That’s the case with most start ups though. I think both have extremely high expenses that I would like to see being brought a little more under control.

 

[joec]

I have long positions in both LCID and RIVN (that were fortunately bought at the lower ends of their trading ranges). Both companies still need to be able to demonstrate they are able to manufacture at scale and at a profit. I am obviously betting that they will be able to get to that point (within a few years…not a decade) but accept that it is certainly not a given.

RIVN has a product that is probably more mass-marketable at the moment (rugged looking lifestyley trucks/SUVs are en vogue) and massive cash stash to hopefully get them close to the point they are mass producing their R2 range (smaller, less expensive vehicles). I also question if they will make a profit on their R1 vehicles given the large batteries and complex widgets and features. LCID has valuable and distinguishable technology (+ vertical integration advantages) and I can’t see the Saudi’s not putting in more funding if that is what is needed to keep running until they reach manufacturing volumes that turn a profit (shareholder dilution becomes a concern).

Technically I think it’s accurate that both would likely go bankrupt if no further funding is secured in the future. That’s the case with most start ups though. I think both have extremely high expenses that I would like to see being brought a little more under control.

I used to work for an energy company, and the costs involved in setting up a single power plant were insane. I don't know how anyone gets these types of businesses off the ground. The up front cash is just such a huge risk.

This is why I stick with software startups. All you need is a few programmers and an internet connection. A couple of million dollars goes a long way.

Lucid will definitely need more money come next year. And probably for a few more years after that. But they'll get it.

 

[HC_79]

Software has been a total mess, to be sure. I have a feeling the inside story on that one is a doozy. And it's too early to tell if they've made improvements there, honestly. The extent of the damage is pretty great. Still Lucid's biggest challenge as far as I am concerned. And probably their biggest failing thus far.

I agree and to be fair the last update seemed to add stability and the most recent update has added some much needed enhancements to the Nav so whilst it shouldn't have been this flawed i'm happy to see that Lucid is actually taking on board what customers want and adding it to the software. As owners and them being a new company we have a very big voice to control what we want to see in the software and seems they're willing to listen. Try and do that with Audi, BMW, Mercedes etc. and your requests will fall on deaf ears.

Lucid has been very responsive when i've reported bugs and suggestions so I do encourage other owners to email customer care. They may already know about a bug you report but don't ever assume and if you don't say anything how can you expect it to be fixed if they don't know about it.

 

[LCIDdreams]

I used to work for an energy company, and the costs involved in setting up a single power plant were insane. I don't know how anyone gets these types of businesses off the ground. The up front cash is just such a huge risk.

This is why I stick with software startups. All you need is a few programmers and an internet connection. A couple of million dollars goes a long way.

Lucid will definitely need more money come next year. And probably for a few more years after that. But they'll get it.

I agree- manufacturing large and complex products is a whole different animal! Weird that I refer to these as startups in retrospect: Lucid was founded in 2007 (Atieva) and Rivian in 2009! They would be mature established companies in the software world!

 

[Demosthenes]

I wouldn’t classify Lucid’s software as absolutely unsellable. Understand that many people (including myself) have had problems, some larger than others, but I can honestly say that using it primarily as a daily city driver, the software has been perfectly adequate and even more so if one takes the time to learn the quirks and steps to mitigate them.

My perspective is one that started on 2.1 though and is now on the latest OTA so I didn’t experience the horrors of the 0.X crowd lol

 

[joec]

I wouldn’t classify Lucid’s software as absolutely unsellable. Understand that many people (including myself) have had problems, some larger than others, but I can honestly say that using it primarily as a daily city driver, the software has been perfectly adequate and even more so if one takes the time to learn the quirks and steps to mitigate them.

My perspective is one that started on 2.1 though and is now on the latest OTA so I didn’t experience the horrors of the 0.X crowd lol

Yes. When I say "Should not have shipped to customers" I primarily mean the Dream Edition users who saw the very first iterations. Good to hear with 1.26, for most people, it's finally just a nuisance, rather than a complete disaster.

I still feel like a major speed improvement must be in process, too. There's no reason waking up the car after a few hours should be an entire reboot. It should be more like opening up your laptop lid. One to two seconds, max, to have everything back up and running.

What probably swayed them, in terms of shipping, is the fact that software is the one thing you can update without sending out technicians to every customer. It's the cheapest thing to fix later.