Rivian Expansion Plans

[doubletwist]

If they don't have some serious expansion of their service capabilities, it's going to be really ugly when Cosmos goes on sale.

Far from Austin, Tesla's top rival sets up shop in North Texas

Electric automaker Rivian is building a 525,000-square-foot distribution facility on the north side of Fort Worth. Here's what we know about it:

www.wfaa.com

 

[gaskiller]

If they don't have some serious expansion of their service capabilities, it's going to be really ugly when Cosmos goes on sale.

Far from Austin, Tesla's top rival sets up shop in North Texas

Electric automaker Rivian is building a 525,000-square-foot distribution facility on the north side of Fort Worth. Here's what we know about it:

www.wfaa.com

Well, right now they have to save costs, Lucid losing 4 billion a year on revenue of 2 billion vs Rivian losing 3.6 billion on revenue of 5.4 billion, give or take.

I hope Napoli can contain costs.

 

[tmichael]

Well, right now they have to save costs, Lucid losing 4 billion a year on revenue of 2 billion vs Rivian losing 3.6 billion on revenue of 5.4 billion, give or take.

I hope Napoli can contain costs.

What are the first 3 areas you would focus on to cut cost?

 

[gaskiller]

What are the first 3 areas you would focus on to cut cost?

Not sure because don’t know where they are spending it. Big issue was the delays in Gravity ramp up. They are a year behind. They couldn’t execute properly.

 

[tmichael]

I'll start, then. First, BOM costs. Some of those will be easier than you think and have already been addressed. They had supplier disruptions and had to take anything they could get in order to build out cars that had been ordered. They are achieving manufacturing and assembly cost reductions and need to continue. I am confident they are and will continue to make substantial unit cost reductions as compared to the early ramp up of production. And, remember, they are no where near nominal production, so there are more to come. Just (I hate that word) execute.

But, the above paragraph was low hanging fruit. Waiting to be picked. The remainder are difficult decisions that, if incorrectly made, can not only make it worse, but take the company down.

Service. Sometimes you have to spend money to save money. I won't pretend to know whether the mobile service model works - I leave that up to more knowledgeable people. I love the idea - I have a mobile service coming to my office and they will be working on my car while I'm sitting with a client. How more productive could that be?!? No time wasted by me and the car gets fixed. I love mobile service.

But, for those things that can't be handled by mobile service, they MUST have more service centers. My personal bet is they don't need as many as you might think, IF mobile service was given all the things they can do - but, I'm not an expert. I do believe backlogs at SC locations would be reduced if they utilized mobile service more.

The challenge in the above paragraph is they need to spend more money, in equipment and people. That is not a savings, it's an increased expenditure.

BUT, I would love to know the costs related to transporting a car from ANYWHERE to a service center, letting it sit in a parking lot (that has to be larger to accommodate more cars waiting for service), paying for a rental (which is never a similar car that the owner handed in AND CONTINUES TO PAY FOR) or having a loaner available for WEEKS on end. Then, truck it back to the owner. These costs, per car, are astounding - and, once volume kicks in the total cost will be really significant at a company level!

I don't know the numbers, but in my opinion they have to commit to a short term increase in SC numbers in order to reduce service costs long term.

The third piece, in my opinion, is warranty costs. Those aren't the same as service costs above. Those are just the cost of getting a vehicle to be repaired. Warranty cost is the cost of correcting a manufacturing or assembly defect. From panel gaps to missing plastic thing-a-majigs to cantrails coming loose to windshield wiper blades that aren't properly seated to - on and on - those should be found at final inspection at the plant, pulled aside and repaired at the plant. They, then, would not be trucked to a service center, stuck on a lot until taken into the garage to fix something that should NEVER have made it out of the gate. Whomever came up with the philosophy "Ship it and we'll fix it later" should be fired.

So, sorry for the rant, but I understand it might be TLDR material.

Have a great weekend, everyone!

Dream Ahead!!

 

[BS8899]

I'll start, then. First, BOM costs. Some of those will be easier than you think and have already been addressed. They had supplier disruptions and had to take anything they could get in order to build out cars that had been ordered. They are achieving manufacturing and assembly cost reductions and need to continue. I am confident they are and will continue to make substantial unit cost reductions as compared to the early ramp up of production. And, remember, they are no where near nominal production, so there are more to come. Just (I hate that word) execute.

But, the above paragraph was low hanging fruit. Waiting to be picked. The remainder are difficult decisions that, if incorrectly made, can not only make it worse, but take the company down.

Service. Sometimes you have to spend money to save money. I won't pretend to know whether the mobile service model works - I leave that up to more knowledgeable people. I love the idea - I have a mobile service coming to my office and they will be working on my car while I'm sitting with a client. How more productive could that be?!? No time wasted by me and the car gets fixed. I love mobile service.

But, for those things that can't be handled by mobile service, they MUST have more service centers. My personal bet is they don't need as many as you might think, IF mobile service was given all the things they can do - but, I'm not an expert. I do believe backlogs at SC locations would be reduced if they utilized mobile service more.

The challenge in the above paragraph is they need to spend more money, in equipment and people. That is not a savings, it's an increased expenditure.

BUT, I would love to know the costs related to transporting a car from ANYWHERE to a service center, letting it sit in a parking lot (that has to be larger to accommodate more cars waiting for service), paying for a rental (which is never a similar car that the owner handed in AND CONTINUES TO PAY FOR) or having a loaner available for WEEKS on end. Then, truck it back to the owner. These costs, per car, are astounding - and, once volume kicks in the total cost will be really significant at a company level!

I don't know the numbers, but in my opinion they have to commit to a short term increase in SC numbers in order to reduce service costs long term.

The third piece, in my opinion, is warranty costs. Those aren't the same as service costs above. Those are just the cost of getting a vehicle to be repaired. Warranty cost is the cost of correcting a manufacturing or assembly defect. From panel gaps to missing plastic thing-a-majigs to cantrails coming loose to windshield wiper blades that aren't properly seated to - on and on - those should be found at final inspection at the plant, pulled aside and repaired at the plant. They, then, would not be trucked to a service center, stuck on a lot until taken into the garage to fix something that should NEVER have made it out of the gate. Whomever came up with the philosophy "Ship it and we'll fix it later" should be fired.

So, sorry for the rant, but I understand it might be TLDR material.

Have a great weekend, everyone!

Dream Ahead!!

I think you summarized many good points. Below are some additional thoughts. Perhaps these points are already implicitly comprehended in your summary:

> Supplier qualification and management: Lucid, like many industries, are dependent on suppliers. But lucid, as the brand-owner and the integrator, must step up and OWN the supplier management issues. Yes, it is a learning process, but it is not rocket-science. Having a discipline-process in place with suppliers in terms of change-control, change notification, etc. are boiler-plate disciplines that should be standard operating procedure. On some of the recent issues Lucid attributed to supplier, perhaps Lucid needs to look at its ow supplier qualification and change control processes. Lucid needs to own its own future, not just relegate the responsibilities to its suppliers.

> Just-in-Time (JIT) management for manufacturing and service: well-known and well-practiced methodologies. Cuts down in holding and sitting on inventories OR the opposite problem of stalling the production line with no parts. JIT can also be implemented in services. Compared to other car/EV manufacturers, Lucid's service center coverage is quite sparse. Mobile-tech is part of the solution. I've used mobile techs on my Lucid and my Rivian. EVs are easier to service with mobile techs than ICE cars. Therefore, expand mobile tech service. Separately. think outside of the box....can Lucid (and other EV manufacturers) work with a non-brand-specific mobile tech provider? For services that need to be done at the service center, the current protocol of having customers make appointments months in advance and then make them bring their EVs and wait another 2-3 weeks in a queue before servicing is a very costly moronic process. Most customers (like me) can bring the car in on relatively short notice. This saves Lucid money and can significantly reduce customer frustration.

 

[doubletwist]

Well, right now they have to save costs, Lucid losing 4 billion a year on revenue of 2 billion vs Rivian losing 3.6 billion on revenue of 5.4 billion, give or take.

I hope Napoli can contain costs.

Yes, they have to make sure they aren't spending money unnecessarily, but a blanket "save costs" will absolutely kill them. It costs money to create, build, and grow an auto manufacturing and service business.

They are (as far as I can tell) hemorrhaging money transporting cars all over the country for service, and paying for loaners and rentals for weeks and weeks while a customer's car sits in a lot behind the service center waiting to be worked on. That's got to be costing them a fortune, while being a very poor experience for the customer, and at the end of the day, that money was spent without building any value for the company, it's just an ongoing cost.

Some of that they can save with almost no cost to themselves, by allowing the customer to not bring in the vehicle until they are actually ready to work on it, at least in the cases when it's a minor issue and the car is still drivable. Costs almost nothing and saves a lot in rental costs.

But that only gets them so far. They also desperately need to spend money to build out their service capabilities. That will give them an asset that adds value to the company and allows them to stop throwing when more money away at towing and car rental companies.

If they aren't going build a sufficient service capability to handle expected (and hoped for) future growth, they are just shooting themselves in the head , and they might as well not bother to stay in business.

 

[doubletwist]

I think you summarized many good points. Below are some additional thoughts. Perhaps these points are already implicitly comprehended in your summary:

> Supplier qualification and management: Lucid, like many industries, are dependent on suppliers. But lucid, as the brand-owner and the integrator, must step up and OWN the supplier management issues. Yes, it is a learning process, but it is not rocket-science. Having a discipline-process in place with suppliers in terms of change-control, change notification, etc. are boiler-plate disciplines that should be standard operating procedure. On some of the recent issues Lucid attributed to supplier, perhaps Lucid needs to look at its ow supplier qualification and change control processes. Lucid needs to own its own future, not just relegate the responsibilities to its suppliers.

> Just-in-Time (JIT) management for manufacturing and service: well-known and well-practiced methodologies. Cuts down in holding and sitting on inventories OR the opposite problem of stalling the production line with no parts. JIT can also be implemented in services. Compared to other car/EV manufacturers, Lucid's service center coverage is quite sparse. Mobile-tech is part of the solution. I've used mobile techs on my Lucid and my Rivian. EVs are easier to service with mobile techs than ICE cars. Therefore, expand mobile tech service. Separately. think outside of the box....can Lucid (and other EV manufacturers) work with a non-brand-specific mobile tech provider? For services that need to be done at the service center, the current protocol of having customers make appointments months in advance and then make them bring their EVs and wait another 2-3 weeks in a queue before servicing is a very costly moronic process. Most customers (like me) can bring the car in on relatively short notice. This saves Lucid money and can significantly reduce customer frustration.

A lot of this exactly is why I think their choice of CEO may have been a brilliant move.

Maybe he doesn't know auto manufacturing specifically, but Lucid already knows how to build amazing cars. What he knows is the points you mentioned for how to build and run a successful manufacturing and service business, which is exactly what Lucid needs right now.

 

[Need4Sleep]

A lot of this exactly is why I think their choice of CEO may have been a brilliant move.

Maybe he doesn't know auto manufacturing specifically, but Lucid already knows how to build amazing cars. What he knows is the points you mentioned for how to build and run a successful manufacturing and service business, which is exactly what Lucid needs right now.

I wish I could repeat this a million times. While we may not have expected Silvio, his work experience has demonstrated a history of working with international logistics and supply chains in mind. Combine this with someone like Cory Steuben as Director of Cost Engineering, I think Lucid's shaping up their leadership so they can scale effectively.

Anyway, back to the topic of the thread, I do agree and I think that once the Cosmos is fully revealed and the media rollout is in full swing, we could very much see these kinds of articles and hype ramp up

 

[illopp00]

I wish I could repeat this a million times. While we may not have expected Silvio, his work experience has demonstrated a history of working with international logistics and supply chains in mind. Combine this with someone like Cory Steuben as Director of Cost Engineering, I think Lucid's shaping up their leadership so they can scale effectively.

Anyway, back to the topic of the thread, I do agree and I think that once the Cosmos is fully revealed and the media rollout is in full swing, we could very much see these kinds of articles and hype ramp up

Agreed, and keep in mind (although the main article is paywalled) I read a lot of Rivian has plans to do all this stuff. Meaning they are in process of production and releasing lots of cars to the market and just now in parallel opening up a logistics center. It seems they also found something existing that met their needs. Lucid needs to take this kind of thinking (Rivian got an existing factory in Normal to retrofit. Tesla got an old Fremont factory to retrofit). Lucid built two new factories from scratch, and are at least only now investing in solar to power the things even though they are both sitting in the middle of a desert.....