Rivian Automotive Inc at Morgan Stanley Laguna Conference Transcript

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

Question: Adam Jonas - Morgan Stanley Co. LLC - Analyst : You said you've been -- as we were sitting down, you're like, you've been crazy busy. What you've been crazy busy doing, and what messages do you have for us today to kick things off?

Question: Adam Jonas - Morgan Stanley Co. LLC - Analyst : Okay. I want to double click on demand and definitely some of the things you're doing with the R1 relaunch, if you will. It really is. I'm not aware of any product that has undergone such an extensive re-engineering. I don't think you are either. You're doing it. But just the issues with the supply and the motor, is this something that kind of threatens the goal of a gross margin positive by year end thing?

Question: Adam Jonas - Morgan Stanley Co. LLC - Analyst : Okay. So supply is a bigger concern right now than demand? Is that fair to say? In the very short term? Real time?

Question: Adam Jonas - Morgan Stanley Co. LLC - Analyst : All right. So you mentioned EVs. Demand seems to be getting politicized. So how is demand then? Is it -- how much of it is [flotization]? How much of it is just wealthy families that wanted an EV got one? I mean you see them all over Westchester. You see them in this part of the world. They're beautiful and customers love them, but finding that next 1% is a big -- it's tough. How much of it is just that kind of the asymptote of that price point? Or is there something else? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 11, 2024 / 5:30PM, RIVN.OQ - Rivian Automotive Inc at Morgan Stanley Laguna Conference

Question: Adam Jonas - Morgan Stanley Co. LLC - Analyst : Okay. So China is not a market that you participate in right now. However, many in the industry argue that China is now the benchmark, really, to use in terms of BOM cost and design and architecture, industrialization, some argue even more so than Tesla, that Tesla is now looking at China, seeing how they're doing things and look to incorporate. So as your team -- tell us what your team has done to help benchmark some of these things. I don't know if you bought an SE7, some call it the SU7. Have you looked at taking it apart and seeing how they design some things? And even though they're different customers and different ethos for the brand, what are you learning?

Question: Adam Jonas - Morgan Stanley Co. LLC - Analyst : All right. Let's talk about R2. I want to talk about R2. I want to move into like -- into tech and in the Volkswagen relationship as well, and we'll open it up. R2, it seems to involve -- you're talking about $40,000, $50,000, kind of sub to $2,000 price point. For that to be profitable, you're going to have to get your BOM cost down --

Question: Adam Jonas - Morgan Stanley Co. LLC - Analyst : Volume adjusted like 60%, 70%. I mean like, how do you adjust that?

Question: Adam Jonas - Morgan Stanley Co. LLC - Analyst : The good old days.

Question: Adam Jonas - Morgan Stanley Co. LLC - Analyst : So if I were to adjust -- if I look at your stock at, whatever it is, $12 today, and if I were to NPV the cash you're going to get from Volkswagen, adjusting for the share count changes, your enterprise value is roughly $6 billion, maybe $7 billion.

Question: Adam Jonas - Morgan Stanley Co. LLC - Analyst : Okay. So the stock market is looking at your business and making some -- solving for, wow, this is going to be really tough. And you have many, many people, including some investors in this room, who are asking the question, is Rivian better off being kind of a stood-up Tier 1 supplier for advanced architectures and technologies and software, a software-led, true software-defined vehicle and design, which were proven, we're going REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 11, 2024 / 5:30PM, RIVN.OQ - Rivian Automotive Inc at Morgan Stanley Laguna Conference to talk more about it, or versus being an OEM? What do you say to them? Why is it important for you to be an OEM? Because, like, they're asking questions about capital, the capital commitments now. And then when you throw in the AI commitments, whether it's on-prem or not on-prem, this is -- what do you say?

Question: Adam Jonas - Morgan Stanley Co. LLC - Analyst : RJ, it sounds like you really want to make cars.

Question: Adam Jonas - Morgan Stanley Co. LLC - Analyst : Okay. (laughter) So why Georgia, then? Do you have enough money to make that your plan A? And why is it -- when you think about various demand scenarios, whether there's demand for 150,000 Rivians or double that in the next few years, I imagine that's part of the calculus as to why you would need just physically more capacity. Or is it that just normal -- just it's too normal of a car plant and you need to put a sheet? Because there's a lot -- again, there's people in the audience listening who are thinking like, why Georgia? Does that really -- they're not confident that's part of the way (multiple speakers) questioning it.

Question: Adam Jonas - Morgan Stanley Co. LLC - Analyst : It seems like the R2 SOP and ramp in Normal is -- opens up, but does it changes the probabilities of expansion.

Question: Adam Jonas - Morgan Stanley Co. LLC - Analyst : I want to move to your autonomous tech, which you've been increasingly moving in-house. And you've explained how it's either farm everything out to someone to do everything or do it all yourself, and this in-between thing, which most OEMs are in some form, is not optimal. And you've decided to more vertically integrate. In addition, to just kind of emphasizing why that was so important to you, I guess specifically, we've discussed this before after this audience, there's many in the AV community and the robotics community that say that large language models and this latest AI turbocharging of machine learning is transforming the way this embodied AI work -- learns. Do you agree? And how does it change your capital, the amount of capital that you allocate towards compute model training or other aspects that you might need to just stay in the game? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 11, 2024 / 5:30PM, RIVN.OQ - Rivian Automotive Inc at Morgan Stanley Laguna Conference

Question: Adam Jonas - Morgan Stanley Co. LLC - Analyst : Can't learn it.

Question: Adam Jonas - Morgan Stanley Co. LLC - Analyst : Do you need them?

Question: Adam Jonas - Morgan Stanley Co. LLC - Analyst : Feel like we teased the audience for a conversation -- another conversation we should have on this ever-growing and changing surface area between AI and your business, and think how Volkswagen can play a part of that, not just as a capital provider because anyone could provide capital, but to help kind of integrate you more and get you closer to those photons and get them closer to those photons and then how they learn, so.

Question: Adam Jonas - Morgan Stanley Co. LLC - Analyst : That's cool.