Rivian Automotive Inc Q3 2021 Earnings Presentation Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Adam Jonas - Morgan Stanley - Analyst : Thanks. Good afternoon everybody. One question I want to follow up, please, on the capacity expansion. I thought the idea was to ramp up Normal first, see everything that works and what doesn't work and then use those learnings to optimize the selection and the architecture of your second plant. So, kind of why expand so soon and how can you still get those learnings done?

Question: Adam Jonas - Morgan Stanley - Analyst : Thanks RJ. And just as a follow-up, I would love any feedback on the early build that you've been delivering. What's going right, where there's -- where those issues and how you're addressing them? And in your last -- in S1, I think early in 20, sorry early in November, there was a comment that you expected the orders at the time which were 55,400 to have them delivered to consumers, these are the R1, I'm referring to, by the end of fiscal '23. I'm just curious if you can reiterate that today based on everything that you're seeing through your lens on the supply chain? Thanks RJ.

Question: Adam Jonas - Morgan Stanley - Analyst : No -- yes, yes, the second part of the question on reiterating the delivery target by end of 2023. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 16, 2021 / 9:30PM, RIVN.OQ - Q3 2021 Rivian Automotive Inc Earnings Presentation

Question: Adam Jonas - Morgan Stanley - Analyst : Thanks RJ.

Question: Robert Saltzman - Wolfe Research - Analyst : Hi everybody. Congrats on what you accomplished and the response to the first product. I was -- wanted to ask you a little bit more about production first of all, obviously a lot is coming together. Where are the biggest bottleneck at this point in the ramp? Where are you focusing operationally? Can you give us some sense of where your daily production rate is now and what you expect to exit the year out?

Question: Robert Saltzman - Wolfe Research - Analyst : Thanks for that. And just also related to production, as your backlog grows, you're going to get to a point where people won't get deliver until 2024, it's a great problem to have. Claire mentioned that you're looking at opportunities to accelerate your strategy. Are there things that you can do to maybe accelerate the ramp that you originally envisioned for the TR1 platform, just given the response to the product or are you I think Claire alluded to, inflation and looking at pricing, are you looking at opportunities to adjust pricing just based on what the demand is for the product?

Question: Robert Saltzman - Wolfe Research - Analyst : Great. Thank you.

Question: Ryan Brinkman - J.P. Morgan - Analyst : Hi, thanks for taking my question. I wanted to ask about the pace of the orders you've been receiving. I think that did maybe increase in the lead up to the IPO, given the increased attention of product that was getting there for the first media review, so the R1T, et cetera, also maybe just because of the increased attention the company was getting around the IPO. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 16, 2021 / 9:30PM, RIVN.OQ - Q3 2021 Rivian Automotive Inc Earnings Presentation So, it would be great to get an update what the pace of weekly orders has been looking like, if that took another big leg up after the IPO with the company's name and the news, maybe some of the market events you've done in California or elsewhere. Also, it would be interested if there's been any maybe increased inbound interest in the RCV platform from potential non-Amazon fleet customers. Thank you.

Question: Ryan Brinkman - J.P. Morgan - Analyst : OK, that's very encouraging. Thank you. And just lastly on me is a question on I guess battery sourcing, strategy. How would you describe the relationship with Samsung? At what point does it make sense to have it maybe more custom-designed battery pack or maybe to in-source or partner with the battery company to vertically integrate manufacturing of the pack? Is there a, I don't know, unit volume threshold or maybe a date in mind by which you would like to bring batteries in-house? How are you thinking about that?

Question: Ryan Brinkman - J.P. Morgan - Analyst : Very helpful. Thank you.

Question: John Murphy - Bank of America - Analyst : Hey everybody. Just the -- a first question on the ramp of the pre-orders, there certainly a bit faster than maybe we were expecting and we thought you have to have a -- more of these trucks out on the road had really build this momentum but it's coming fast and (inaudible). So, I'm just curious relative to your expectations how the pre-orders are rolling in and if you have any early read sort on the demographics and the vehicles that are certainly not being treated indirectly here but where are these buyers are coming from? Any sort of specifics around these folks because it's a lot and it's pretty quick.

Question: John Murphy - Bank of America - Analyst : And so RJ, any early read on who these folks are, are they (inaudible) stepping up into trucks or the truck buyers that are staying in trucks, I mean what's the -- what's the early read on sort of the folks that are -- they are placing these pre-orders?

Question: John Murphy - Bank of America - Analyst : It's something you got really high-class problem on your hands. Just lastly on the Georgia facility, 7,500 jobs, I used a multiplier on that. You (inaudible) argue for Georgia this is going to be a 50,000 or 100,000 net incremental jobs all-in when you go through the value chain. I'm just curious as you worked out this deal with Georgia, what the terms are and Claire, I mean if you were thinking about this on a gross CapEx versus net CapEx, I mean how big a benefit is it going to be to have worked with Georgia versus what would you spend otherwise?

Question: John Murphy - Bank of America - Analyst : And could you quantify that all, I mean it's just -- I mean it's a good -- really good thing for Georgia, I mean they should be pitching in. I'm just curious what -- maybe relative to your base case expectations versus what you're able to work out here, if you can give us an idea of what you got on the capital side or [NPV]?

Question: John Murphy - Bank of America - Analyst : OK, great. Thank you very much.

Question: Brian Johnson - Barclays - Analyst : Yes, thank you. I just want to drill a little bit more down on the production ramp. You know, if you kind of think through you mentioned the word constraints which of course brings to mind the classic theory of constraints. Could you maybe describe in a little bit more detail where you think the key constraint is now? You did mention perhaps the welding of the battery packs and how do investors get confident that -- the constraint can be knocked off versus their worst case something, fundamental about the design of the vehicle or the battery packs that would complicate any ramp.

Question: Brian Johnson - Barclays - Analyst : And just to follow up, anything in terms of having to go back to the drawing board and either the configuration of the pack, particular parts or things that would be longer cycle fixes as opposed to just ironing out the kinks and attacking bottlenecks on a daily basis that come up?

Question: Brian Johnson - Barclays - Analyst : OK, thanks.

Question: Mark Delaney - Goldman Sachs - Analyst : Yes, good afternoon and thank you very much for taking the questions. So, I'm hoping to start on the commercial side of the business, the 201 miles of estimated range that you're seeing. It's very attractive, I think it would cover a number of route and so I'm hoping to better understand what it may take to build upon that initial 100,000 order from Amazon. Is it executing that -- some of the technical milestones as you seem to be doing or it would be more around having to hit a certain percentage of that order in terms of delivering vehicles before the maybe upside to that initial 100,000?

Question: Mark Delaney - Goldman Sachs - Analyst : That's helpful. And for my second question, I was hoping you could comment on the supply environment in terms of the semiconductors and other components. You know, it's been tight for a long while now and auto companies are starting to see a little bit of easing as we move to the fourth quarter, reopening some previously closed factories. At the same time, unfortunately we have the omicron variant that could perhaps complicate things. So, I'm just hoping you can [give] me more specific on any changes that the company maybe seeing in its supply chain environment. Thank you.

Question: Emmanuel Rosner - Deutsche Bank - Analyst : Yes, thank you very much. My first question is around software subscription. On what timeline would you expect to start essentially seeing some of these revenues [post] on the commercial side with Amazon, is that going to be from day one and then on the consumer side? And then any sort of like initial views on the consumer side in terms of [big] rates or sort of like average subscription revenue for a vehicle?

Question: Emmanuel Rosner - Deutsche Bank - Analyst : OK, that's great color. And then my second question, coming back to the topic of ramping up production, so RJ, I understand your points around is not being structural and obviously to be expected I guess with this kind of challenge and environment. But based on what you've seen so far and sort of going through these issues, are you generally confident that you should -- your ramp up should be on target to be able to deliver some of the 2022 target where we see some reports, early -- a few weeks back around some of the SUV delivery timeline (inaudible) pushed out, and so overall, are you confident that your -- this is mostly the rear view mirror and going forward you're tracking in line with some of your delivery target?

Question: Emmanuel Rosner - Deutsche Bank - Analyst : Great. Thank you.

Question: Alexander Potter - Piper Sandler - Analyst : OK, thanks guys. First question is on in-house cell capacity in Georgia. You alluded in the investor letter that they will have in-house cell capacity contemplated to be co-located with that facility in Georgia. I'm just -- I'm interested is that going to be the case from day one in 2024 or is it something that you're working into the plan to eventually have in Georgia?

Question: Alexander Potter - Piper Sandler - Analyst : OK, great. The second question just on DC fast chargers, if I recall you were working on a target of 600 or so DC fast chargers in the network. I'm just curious to hear if your -- if that is still is the target, what the timeline is behind that and then the opportunities to accelerate maybe also regions of initial focus? Thanks.

Question: Alexander Potter - Piper Sandler - Analyst : Great. Good to hear. Thanks for taking the question, guys.

Question: George Gianarikas - Baird - Analyst : Hello, everyone. Thanks for taking my question. Sort of tangential to a previous question asked but some of your auto OEM colleagues have recently secured critical material supply chain contracts and I'm curious as to how you think about the easy materials supply chain and how much of priority you placed on making sure you have materials for the next several years as you ramp production? Thank you.

Question: George Gianarikas - Baird - Analyst : Thanks.