{"id":35761,"date":"2022-01-06T20:31:58","date_gmt":"2022-01-07T01:31:58","guid":{"rendered":"https:\/\/philip.greenspun.com\/blog\/?p=35761"},"modified":"2022-01-07T00:29:49","modified_gmt":"2022-01-07T05:29:49","slug":"how-is-rivian-still-worth-78-billion","status":"publish","type":"post","link":"https:\/\/philip.greenspun.com\/blog\/2022\/01\/06\/how-is-rivian-still-worth-78-billion\/","title":{"rendered":"How is Rivian still worth $78 billion?"},"content":{"rendered":"\n

In What edge does Rivian have in the truck or EV market?<\/a> (November 2021) I wondered how Rivian could be worth $127 billion, given that Ford will soon be selling electric pickups. As of today, the company is worth $78 billion and GM has promised to start delivering electric pickups in volume within two years (engadget<\/a>). Like the Ford, the Chevy starts at around half of what Rivian wants for its electric pickup. If everything goes perfect, Rivian will produce a handful of trucks before Chevy pushes the Silverado EV out the door in late 2023, but why does that translate to $78 billion in long-term value? If there is $5,000 in profit to be had from each truck and we use a discount rate of 0%, Rivian needs to sell more than 15 million trucks before $78 billion in profit is generated.<\/p>\n\n\n\n

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The GM truck does seem better than what Rivian is offering due to the capability of extending the bed via folding back seats. And with a massive frunk it would be a pretty good family vehicle (put the stuff that is valuable and\/or can’t get wet in the frunk). Why would anyone pay $67,500 for the Rivian when the “work” version of the GM can be had for $40,000?<\/p>\n\n\n\n

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In my opinion, the Silverado interior and dashboard seem to be better-designed than what Rivian offers. If we wanted a pickup truck we certainly wouldn’t pay extra to get a Rivian rather than a Chevy or Ford and it doesn’t seem likely that Rivian can profitably produce trucks at the Chevy or Ford price.<\/p>\n\n\n\n

Can someone again please explain to me why Rivian is worth anything?<\/p>\n\n\n\n

[Also, what about my faith in the Efficient Market Hypothesis<\/a>? How did Rivian go down in value by 40 percent over two months? There haven’t been any surprises from the legacy car manufacturers.]<\/p>\n\n\n\n

Related:<\/p>\n\n\n\n