Rivian's $24 Billion Bet: Spend The Cash Now, Scale Later

"Ultimately, we wouldn't be building a business if we didn't plan for the business to make money. You don't build a very large company by pinching pennies. Rivian very clearly chose the first option of spending an uncomfortable amount of money rather than not building a car company at all, which are essentially the only two viable paths for automotive startups in the 2020s."

"Unlike Tesla, which had the luxury of starting up when the EV niche was sleepy and very few North American competitors were serious about fully-electric cars, Rivian entered into the market where it already had an enormous competitor and other brands were hot on Silicon Valley's heels. On top of that, market dynamics during Covid significantly squeezed Rivian's pockets due to supply chain constraints."

Rivian has spent approximately $24 billion in cash over eight years, raising investor concerns about the company's financial trajectory. CEO RJ Scaringe defends this spending as essential for building a major automaker, arguing that competing in the modern automotive industry requires substantial capital investment. Rivian's cash burn exceeds that of other EV makers including Ford's EV segment, Lucid, Polestar, and Fisker. Scaringe emphasizes that Rivian entered a competitive market unlike Tesla, which launched when EV adoption was nascent. Additionally, COVID-19 supply chain disruptions further strained Rivian's finances. The company maintains confidence in its business model's eventual profitability.

Read at insideevs.com