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11-11-2021, 12:16 PM
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#21
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Thinks s/he gets paid by the post
Join Date: Mar 2018
Posts: 3,504
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Quote:
Originally Posted by NW-Bound
FOMO rules supreme, from cryptocurrency to unicorn stocks. Rivian is so richly valued in comparison to Tesla. In terms of valuation, Tesla does not hold a candle to Rivian.
"According to the plan, by the end of this year, Rivian will produce and deliver more than 1,000 electric vehicles (all types)."
And here's how Tesla valuation looks. The fewer cars you make the more valuable you are. People should look to Nikola, who has made 0 vehicle, and does not even have a prototype. Way better valuation than Rivian, at $5.6B for 0 vehicle, vs. Rivian's $100B for 1000 vehicles. Buy, buy, buy...
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Now do projected sales for Tesla and other car manufacturers for 2031.
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11-11-2021, 12:26 PM
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#22
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Thinks s/he gets paid by the post
Join Date: Mar 2018
Posts: 3,504
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Quote:
Originally Posted by NW-Bound
However, the stock is priced as if Tesla has taken all over the car manufacturing, to become THE car maker of the world. I remain skeptical of that. It's not like nobody else knows how to build EVs, which are really just battery and electric motor.
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And that's the beauty of it. Less moving parts, fewer maintenance and breakdowns. Not ever going to a gas station or needing an oil change. Plugging your car into your outlet at home. Etc. etc. I'm sure you are aware of this stuff, but it's truly disruptive to the status quo.
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Tesla may have features other cars do not have, but is it enough to drive all other makers to bankruptcy?
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Bankruptcy of all other car makers is a bit harsh. That's not realistic.
It's not just the features on the Tesla vehicles. It's the efficiencies they are getting out of the giga factories, meaning they will be able to throughput more vehicles per hour at a lower price than other car manufacturers. It's autonomous driving--Tesla has a huge lead in this area. It's EV battery technology and charging station networks. Tesla leads by far in this area. Solar roof panels. Tesla is not simply an EV car maker. It's a whole system.
Quote:
But back on this Rivian, it's a real company and may build good vehicles. It's not worth $100B though.
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Can't be. They don't have revenue.
__________________
Age is a very high price to pay for maturity.
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11-11-2021, 12:33 PM
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#23
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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^^^ Sales projection out to 2031? Does anybody have a crystal ball that good?
About self-driving cars, don't get me started. People who think Tesla has a lead on this technology will do well to check out demos by MobilEye demonstrating an SDC driving around Tel Aviv with no lidar a year ago. It puts Tesla to shame. Compared to MobilEye's performance more than a year ago, the current Tesla FSD looks farcical, as seen on many YouTube videos.
And MobilEye still says it's not ready. The guy who makes the most noise is often not the best.
But back on Rivian, Tesla looks like a value stock compared to Rivian. I don't touch any of these names in the EV sector. They may be fine companies, but their stock valuation is not something I want to pay.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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11-12-2021, 01:41 PM
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#24
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Moderator Emeritus
Join Date: Apr 2011
Location: Conroe, Texas
Posts: 18,727
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Quote:
Originally Posted by NW-Bound
But back on Rivian, Tesla looks like a value stock compared to Rivian. I don't touch any of these names in the EV sector. They may be fine companies, but their stock valuation is not something I want to pay.
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When the market takes a big breather from the over-hype almost everywhere, a readjustment in value will take place. Just hope you are not one of many holding the empty bag.
__________________
*********Go Yankees!*********
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11-12-2021, 05:41 PM
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#25
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Full time employment: Posting here.
Join Date: Dec 2014
Posts: 670
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Quote:
Originally Posted by NW-Bound
However, the stock is priced as if Tesla has taken all over the car manufacturing, to become THE car maker of the world. I remain skeptical of that. It's not like nobody else knows how to build EVs, which are really just battery and electric motor. Tesla may have features other cars do not have, but is it enough to drive all other makers to bankruptcy?
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I hope they don't - or buying cars will become very boring.
The main issue with making many EVs is battery supply. Tesla is battery constrained. Even when they are the largest buyer of batteries. The challenge for the others is that they have all to share what is left. Before the current chip shortages many EV factories had to stop production temporarily because of battery shortages.
Tesla is currently building at least two battery factories in addition to the two they currently have. In this area they are way ahead of the competition. Their battery factories are also aiming for much higher production capacity than the new factories I read are being built or planned by others.
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11-13-2021, 06:56 AM
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#26
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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When a company has growing sales, its stock is rewarded with a high valuation as investors flock in to participate. This is always true, no matter what business the company is in. Not just EV, but it could be coffee (Green Mountain Coffee), or donuts (Krispy Kreme), etc...
Often, when sales are growing fast, investors do not mind if the company is selling at a loss, because they expect the company will "make it up in volumes" later. This does not always work out, as we have seen with the dotcoms in the late 1990s.
Tesla's sales are definitely growing, and the company deserves a higher valuation than traditional car makers. The question one ponders is how high it should be.
Tesla's sales are expected to reach 1 million car in 2021. The company's valuation is $1 trillion. That's $1 million for each car that it produces this year. Is that too high, or not high enough?
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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11-13-2021, 06:30 PM
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#27
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,809
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I read that the more affordable Explorer truck from Rivian is only $68k.
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11-14-2021, 04:41 AM
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#28
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Full time employment: Posting here.
Join Date: Dec 2014
Posts: 670
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Quote:
Originally Posted by NW-Bound
Tesla's sales are expected to reach 1 million car in 2021. The company's valuation is $1 trillion. That's $1 million for each car that it produces this year. Is that too high, or not high enough?
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More like 900.000 cars in 2021 I believe. But close enough for this.
Rivian will make around 1000 cars in 2021 and is valued at 127 billions. Which would be $127 million for each car.
Which is ridiculous when the Rivian upstart is valued so much compared to the experienced Tesla which even the boss of VW says is much better at volume production than they are. Rivian hasn't started on volume production yet.
But looking back when valuing growth companies does not give me much. I would much rather look forward.
With their valuation Rivian should have enough money to fight many obstacles.
Their cars are expensive - like the first Teslas Models S and X. It was first when Tesla introduced the much lower priced Models 3 and Y that their revenue and profit started to soar. Rivian seems to be priced like their expensive pickup and SUV models will sell much better than Teslas much lower priced cars.
To me this sounds like investors did not even to the most basic napkin maths on Rivian. Perhaps they missed out on Tesla and now jump in without looking hoping that this EV company will be as successful as Tesla.
Quote:
Originally Posted by NW-Bound
Tesla's sales are definitely growing, and the company deserves a higher valuation than traditional car makers. The question one ponders is how high it should be.
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Tesla said years ago that they planned to increase the car production by 40% per year until 2030. So far they have exceeded their yearly goals. Which is to make 20 mill cars per year in ca. 2030. And recently they guided a 50% yearly growt from here on. With fixed (?) costs not growing by much this make for interesting graphs when projecting revenue and profit in the years to come.
Then you have Tesla Energy and their very big batteries like the one in Hornsdale. The energy sector has a much larger TAM than the car industry. Other companies make large battery packs too. But how many can they make.
Just like batteries in cars - batteries in megapacks for Energy balancing need to come from somewhere. And this is where Tesla shine in my book. Not only are they building battery cell factory capacity greater than anyone else. They are also building a factory making the machinery needed to build battery cell factories. Without tons of batteries available how will the competition beat Tesla in production capacity?
And then you have the software part of Tesla. Monthly subscriptions is the holy grail for the valuation of many tech companies. Tesla already have some income here from premium multimedia and autopilot functions in their cars.
The autopilot in my car is pretty shitty compared to the closed beta of the new generation autopilot being tested by a closed beta test group. But I'm already there that I would not consider a car without this function. So I will gladly pay a monthly fee or a large upfront amount. The amount of potential customers grow faster and faster.
And when they get the autopilot complete enough to drive on it's own they plan to launch a robot taxi service. I haven't included this in my valuation of Tesla but I'm sure it's coming. I just don't know when. And it will be big.
The competition from other EV companies like Rivian and the traditional car makers will come. And from other megapack battery makers. But since almost none of them - with Ford as possibly the best exception here - think much about where they will get their battery supply from I think they will grow slower than many expect.
My last point here is that I wonder how GM, Ford, VW and the rest will manage the cost of becoming EV companies. In addition to the Teslas the only other EV I know that is selling at a profit today is the very high priced Porsche Taycan.
While fossil car sales and profits dwindle they must shut down their fossil engine production lines and let people with the wrong knowledge go so that their pension commitments grow. And at the same time they must invest in research and development into electric motors, modern connected cars and they really should look into battery production too.
It will be interesting to watch.
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11-14-2021, 07:21 AM
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#29
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,298
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Knowing how long it took for Tesla to put together more than one profitable quarter, I wouldn’t bet on Rivian. Will they have the cash to survive the long slog to becoming a going enterprise, sales, distribution, service, capital, etc. But best of luck to those who do.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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11-14-2021, 08:24 AM
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#30
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 7,719
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While not relevant to this thread, I just could not help myself.
Folks ought to invest wodges of cash in Freeway Service Centers. All these electric car & truck owners will need somewhere to stay, eat and entertain themselves while ALL their cars are charging.
I am sorry but I am not a believer that they will take over the world. OK for pottering around the hood I suppose, but for long distances, I do not see it. Maybe when batteries can charge in the time it takes for a potty break, but until then......
__________________
"Never Argue With a Fool, Onlookers May Not Be Able To Tell the Difference." - Mark Twain
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11-14-2021, 08:50 AM
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#31
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,298
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Quote:
Originally Posted by ShokWaveRider
While not relevant to this thread, I just could not help myself.
Folks ought to invest wodges of cash in Freeway Service Centers. All these electric car & truck owners will need somewhere to stay, eat and entertain themselves while ALL their cars are charging.
I am sorry but I am not a believer that they will take over the world. OK for pottering around the hood I suppose, but for long distances, I do not see it. Maybe when batteries can charge in the time it takes for a potty break, but until then......
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Most drivers don’t do long distance driving every day, so that’s not the base case that EV hesitants like to throw out there. Over 90% of EV owners charge at home, where it’s cheap and convenient, so access to chargers elsewhere isn’t as big a barrier for most people as you might think. Assuming charger access has to be anything like gas station access is an invalid assumption. It’ll take far fewer charge stations than present gas stations to make EVs viable. There will be millions of two car homes with an EV and an ICE over the next decade, another viable solution.
Only those who drive long distances often and/or people without access to any home charger have that reason to rule out an EV. There will be many
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No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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11-14-2021, 08:59 AM
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#32
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 7,719
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Quote:
Originally Posted by Midpack
There will be millions of two car homes with an EV and an ICE over the next decade, another viable solution.
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I can see one as a second car. That may be practical. But I do not see it as a cost advantage, especially with the price premium. For those who are super green, it may make them feel better, which is a good thing, as there are a lot of folks who are not. I would like a good 2 place electric Motor Cycle/Scooter for local pottering, but no one makes an affordable one yet.
We use about 1 tank of petrol a month, the cost is not a factor. BUT when we take car trips, we do ~700-800 miles a day, that is important to us. I do not consider us a great contributors to climate change as we do not have a huge carbon footprint. We are all electric with the exception of a propane BBQ and Tankless Water heater, we use about 100 gallons of propane a year, if that. OMDV.
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"Never Argue With a Fool, Onlookers May Not Be Able To Tell the Difference." - Mark Twain
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11-14-2021, 01:00 PM
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#33
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Tesla has had some impressive successes, but I have doubts about many of Musk's promises. Some of the things he said have not proven out, and are nowhere near the goals that were set. I will not pay in advance for "pie in the sky" promises.
Not all investors are comfortable with Tesla's valuation, and if they are not buying Tesla, they sure as heck will not touch Rivian.
I am not saying Rivian may not become a viable EV maker. It may very well will be, with the backing of Amazon and Ford. I am saying Rivian is not worth the $100B current valuation. I am not buying. Of course, there are plenty of investors who don't agree with me. It's fair. It's their money to do as they wish.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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11-14-2021, 01:33 PM
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#34
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,809
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I just don't see why one would spend so much on a Tesla or Rivian when you can get 50 mpg with a hybrid Camry.
Also the RAV4 Prime has hybrid + EV 40 mile capability. So for a city car the RAV4 Prime would be really nice and you don't have to tolerate the charging issues or the range issues. Plus you have the clearance to drive on rutted roads and such. You can visit Death Valley all you want.
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11-14-2021, 01:52 PM
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#35
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Full time employment: Posting here.
Join Date: May 2008
Location: Lexington
Posts: 714
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As an engineer with an auto background, I would not touch Rivian anytime soon. To frame it, Rivian has projected it will reach 1M autos in production...in 10 years. It is currently custom making auto's, similar to many of the other small auto companies that haven't actually entered anywhere near production.
That means it is no were remotely close to beginning production hell, which will be a several year process. It is basically where Tesla was sometime in the early 2010's. The 10-year growth is not impressive comparative to any reasonable competitor, and the current valuation is so off, by a couple orders of magnitude. I believe a large majority of investors are very skeptical as a result. This could be a great company eventually, but the stock is almost inevitably going to nose-dive for a long time before they can start reaching their first positive quarter.
As for how it initially got such a crazy valuation, the story doesn't sound good when you dig into it. Amazon was cut a sweet deal of 20% stock at a low price in exchange for a non-binding promise from Amazon to buy 100K trucks, if Rivian can deliver at a price and quality Amazon will accept. Ford also bought 5%, likely because Ford needs to develop as much help as it can get to transition to EV's, since it is pretty behind a majority of its competitors at this point. While this is mildly positive, it is not going to prop Rivian up past a year, when the lock-in period ends for a lot of their early investors who will likely want a quick payoff on a stock with a lot of bad quarters ahead of it.
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11-14-2021, 02:10 PM
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#36
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2006
Location: west coast, hi there!
Posts: 8,809
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So when should one short Rivian?
P.S. I have never shorted a stock yet.
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11-14-2021, 02:46 PM
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#37
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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^^^ Tempted as I have been with some stocks, I have never sold anything short.
"The stock market can remain irrational a lot longer than you can remain solvent."
It is safer to buy put options, which have a lower risk, and I have looked into it. The premium is high, however, and the time value of the option significantly reduces the potential reward. I passed it up.
I make plenty of money doing the things that I already do, and don't want to take on more risks.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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11-14-2021, 03:01 PM
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#38
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,298
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Quote:
Originally Posted by ShokWaveRider
I can see one as a second car. That may be practical. But I do not see it as a cost advantage, especially with the price premium. For those who are super green, it may make them feel better, which is a good thing, as there are a lot of folks who are not. I would like a good 2 place electric Motor Cycle/Scooter for local pottering, but no one makes an affordable one yet.
We use about 1 tank of petrol a month, the cost is not a factor. BUT when we take car trips, we do ~700-800 miles a day, that is important to us. I do not consider us a great contributors to climate change as we do not have a huge carbon footprint. We are all electric with the exception of a propane BBQ and Tankless Water heater, we use about 100 gallons of propane a year, if that. OMDV.
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A little patronizing? You realize there’s another big reason people choose EVs aside from running cost savings alone. [I don’t own an EV, but expect to in the next few years]
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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11-14-2021, 04:39 PM
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#39
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Thinks s/he gets paid by the post
Join Date: Dec 2015
Posts: 1,166
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Quote:
Originally Posted by NW-Bound
Not all investors are comfortable with Tesla's valuation, and if they are not buying Tesla, they sure as heck will not touch Rivian.
I am not saying Rivian may not become a viable EV maker. It may very well will be, with the backing of Amazon and Ford. I am saying Rivian is not worth the $100B current valuation. I am not buying. Of course, there are plenty of investors who don't agree with me. It's fair. It's their money to do as they wish.
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Rivian is expected to sell less than 40,000 vehicles next year. That's 1/32nd Tesla's forecasted 2022 vehicle sales. Yet, FOMO buyers have bid up Rivian to more than 1/10th Tesla's market cap. That valuation makes absolutely zero sense based solely on expected near-term sales.
Quote:
Originally Posted by Christine
To me this sounds like investors did not even to the most basic napkin maths on Rivian. Perhaps they missed out on Tesla and now jump in without looking hoping that this EV company will be as successful as Tesla.
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I agree. Several family members of mine who "have never bought a single stock" in their lives are salivating at the chance to buy RIVN - all because my nephew works there and has told them how "hot" it is. They know absolutely NOTHING about how to value the company or assess it's prospects.
RIVN valuation to me is bonkers and totally unsupported. I've never shorted a stock before, either, but it's sure tempting to short RIVN. The risk in that, though, is there are so many people like those I described above that are going to likely keep pushing it up - at least short term. But long term, it almost HAS to go splat in a big way..
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11-14-2021, 06:57 PM
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#40
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Speaking of people who are not accustomed with big numbers, I do not have a Twitter account but the other day when looking at Musk's polling about selling Tesla shares, I saw a reply by a Twitter poster who said "Yes, Musk should sell 22 billion dollars worth of stock. If divided by the world population, everyone gets 3 million".
Hah! Did this guy think the world had only 7 thousand people, instead of 7 billion people? Or he did not know what a billion is?
Musk would need 22 quadrillion in order to give everyone 3 million, instead of just 3 bucks.
What is more interesting is that the Twitter poster got several hundred up votes. I scratched my head, wondering if this was a joke.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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