Spak found a sizeable addressable market that is up for grabs as the industry goes electric.
He liked the segments that Rivian chased. Rivian will initially focus on the NA market, a region he believes is on the cusp of a BEV inflection. Further, ~77% of 2021 U.S. light vehicle sales are trucks, where the Rivian consumer portfolio is focused. Rivian's initial consumer products, the R1T and R1S, are impressive and category-defining.
He found Rivian's clean sheet approach and tech allows for vehicles as a platform for recurring revenue.
He noted Rivian's diverse business model and having Amazon.com Inc (NASDAQ: AMZN) involvement helped add scale. Amazon allows Rivian to attack the electric last-mile delivery market with a great partner that can provide invaluable feedback. Further, the Amazon order of 100K vehicles by 2025 with an estimated $7 billion value helps provide visibility.
However, he cut the 2023 production expectations as Rivian will switch to introduce LFP packs and their new in-house Enduro motor and plans to re-rate their plant to allocate 75% of production to the R1, which will require a multi-week changeover.
Price Action: RIVN shares traded higher by 1.52% at $34.3 on the last check Wednesday.
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