Re:Rivian Loses $33K on Every Truck It Sells: Report
by Tagbert on Thursday October 05, 2023 @10:06PM
(#37786466)
That is similar to all the blog reports last spring claiming Ford was losing $3B a year on their EVs based on the bottom line numbers in their quarterly reports. Those same blogs ignored the numbers earlier in the report about Ford spending about $3B on battery and vehicle assembly factories and equipment.
1. Each car costs $33k more to make than it sells for. Marginal cost > marginal revenue. Selling more cars will hurt the business. Quite dramatic, basically nothing can be done.
2. Each car costs less than it sells for. Marginal cost < marginal revenue. But the business overall is making a loss, equivalent to $33k times cars sold due to fixed costs. Selling more cars helps the business. Less dramatic, business as usual for a company that can only be profitable at scale, nothing new.
Headline says #1, but I really doubt itβs #1.