Speaker 1: I'm Matt Miller and I'm Hannah Elliott, and this is
Speaker 1: hot pursuit.
Speaker 2: All right. We finally get to talk about the nine
Speaker 2: to eleven hybrid that you drove, finally, and I'm excited
Speaker 2: to talk about that because you know how much I
Speaker 2: loved the hybrid Corvette that I drove. They're different animals,
Speaker 2: but they're inevitably going to be compared, and I think
Speaker 2: it's exciting. I also want to talk about a couple
Speaker 2: of roadsters that I've driven back to back. One, the
Speaker 2: Mercedes A AL sixty three was over two hundred thousand dollars,
Speaker 2: but it is a two door four seed convertible with
Speaker 2: a V eight. And now this week I'm driving another
Speaker 2: two door four seed convertible with a V eight that
Speaker 2: costs substantially less, the Mustang GT. It's only sixty grand,
Speaker 2: and I feel like it's a lot more fun than
Speaker 2: the MRC.
Speaker 1: I am not surprised to hear you say that in
Speaker 1: the least.
Speaker 2: But we'll get to that tracks. We also are going
Speaker 2: to cut the Rivian, not only the Rivian deal with Folkswagen,
Speaker 2: but more interestingly, like a deep dive into the origin
Speaker 2: story of Rivian and the CEO personally RG Scaringe, and
Speaker 2: how he's run this business kind of in obscurity for
Speaker 2: most of the time he's been doing it and now
Speaker 2: like all of a sudden he was a massive success
Speaker 2: and then now kind of a stock market failure. We
Speaker 2: have Max Chafkin from business. We can talk to us
Speaker 2: about that. So let's get straight to the nine to eleven.
Speaker 2: Now you can tell us how bargo is lifted. How
Speaker 2: was it? You know what?
Speaker 1: It was awesome, And the hybrid was the least interesting
Speaker 1: thing about it. It's kind of like a nothing burger.
Speaker 1: It's like, yeah, it's slightly faster, it's slightly more powerful.
Speaker 1: I would challenge you to get in that car blindfolded
Speaker 1: and tell me that you know it's a hybrid. The GTS,
Speaker 1: of course, is an existing line in the nine to
Speaker 1: eleven portfolio. This new GTS it happens to have lost
Speaker 1: a turbot charger and gained an electric and emotor that
Speaker 1: they've attached to a single bigger turbo charger. That's got
Speaker 1: them a little bit more horsepower. It's got them a
Speaker 1: little quicker speed of zero to sixty. But honestly, this
Speaker 1: is going to be like a nine to eleven that
Speaker 1: you know and love already. It's it's firmly in the
Speaker 1: middle of the lineup handles. Great. There are some differences
Speaker 1: in the cabin though that I would say, those to
Speaker 1: me were bigger deals than what's under the hood. Starting
Speaker 1: with they've removed the faux key on the ignition, so
Speaker 1: instead of on the left side turning the key, it's
Speaker 1: now a push button start.
Speaker 2: That's weak sauce.
Speaker 1: Which two I mean. I think they had announced that
Speaker 1: that was going to be the case, but I hadn't
Speaker 1: realized that. And I get in the car and I
Speaker 1: go to turn it on and there's nothing there, and
Speaker 1: I'm hitting the dashboard and then I realized, oh, it's
Speaker 1: a button. It was very it was shocking.
Speaker 2: I would prefer, frankly, and then maybe it's just a
Speaker 2: sign of my age. I would prefer to have a
Speaker 2: real key that you put in the addition to the
Speaker 2: left of the steering wheel. It would solve a lot
Speaker 2: of the problems I have at parking garages. I always
Speaker 2: forget to leave the key for the attendant. And also
Speaker 2: it's like a cool way of mechanically interacting with your vehicle.
Speaker 2: But I guess they don't really care about that.
Speaker 1: More people care, for sure. And I did ask Frank
Speaker 1: Moser about it from Portia, and he said, look, if
Speaker 1: enough people hate it, maybe we can go back and
Speaker 1: you know, take it out for another generation and put
Speaker 1: in the faux key again. But I doubt it. The
Speaker 1: other thing I think that really you tell me how
Speaker 1: you feel about this. They've removed the back seat. So
Speaker 1: now for nine to eleven Carrera and Carrera GTS models,
Speaker 1: the back seat does not come standard. You can select
Speaker 1: it as a no cost option. But if you do
Speaker 1: not make that selection in the configurator, no back seat
Speaker 1: for you. How do you feel about that?
Speaker 2: I don't love it. I mean, I'll say this, it
Speaker 2: looks cool to me if I see a car like
Speaker 2: a nine to eleven that has no back seat. I
Speaker 2: think it's cool when people option no back seat in
Speaker 2: that vehicle. But I think the back seat should be standard.
Speaker 2: It's part of the history of nine to eleven that
Speaker 2: it has four seats, right. The back seats weren't really
Speaker 2: usable anyway, except for in a pinch, and I had
Speaker 2: a nine to eleven for a long time. There are
Speaker 2: times when you just have to squeeze another person in
Speaker 2: the car and it helps to have that. If you
Speaker 2: don't have a back seat, it makes it really a
Speaker 2: lot more illegal to drive somebody around in the back
Speaker 2: in most jurisdictions, right, And also it's like a nice
Speaker 2: place to rest things. They look good sah. I think,
Speaker 2: you know, unless you're going for like the racier like
Speaker 2: GT three look with the paf cage, I think I'd
Speaker 2: rather have seats.
Speaker 1: Yeah, yeah, This to me feels like a very brilliant
Speaker 1: cost cutting move by Portie. And if there's anybody who
Speaker 1: can cut car, it's a Schwabian because they kind of
Speaker 1: they know that people will freak out if you have
Speaker 1: to pay more for a back seat, so but they
Speaker 1: also know that if that most people they may not
Speaker 1: select it. If you have to actually push a button
Speaker 1: and select it and go through the whole thing, maybe
Speaker 1: people won't select it. So it's like they can save
Speaker 1: some money on installing seats that nobody wants anyway, quote unquote,
Speaker 1: but they save themselves the public uproar of this huge
Speaker 1: announcement that now they're going to charge you for something
Speaker 1: that you didn't used to have to pay for. So
Speaker 1: it seems mary clever.
Speaker 2: There's so many two plus twos that are doing it now. Yeah,
Speaker 2: you know, from the lowly Dodge Challenger they offer a
Speaker 2: no cost option to get rid of the seats, and
Speaker 2: a lot of those trim levels to the UH. I
Speaker 2: noticed the new AMGGT either come standard with no back
Speaker 2: seats or can be option with no back seats. Of course,
Speaker 2: the new AMGGT now is a four seater like the
Speaker 2: SL sixty three. But I guess those are cost cutting measures,
Speaker 2: and I've noticed them coming at Portie for a long time.
Speaker 2: They dropped the emergency brake, they dropped the key in
Speaker 2: the ignition, and now they dropped the backseat. Now they're
Speaker 2: getting rid of actual gauges. I mean, all of these wonderful,
Speaker 2: full little luxury touches, they don't really give you anymore. Yeah,
Speaker 2: those things bugged you about it? What about the gauges?
Speaker 2: What do you think about the experience?
Speaker 1: That's a really good back gauges. You know, I think
Speaker 1: it's going to use that word again. I think it's
Speaker 1: going to be a little bit polarizing because now the
Speaker 1: cabin in the nine to eleven has no analog gauges.
Speaker 1: There is a curved screen behind the steering wheel where
Speaker 1: the five gauges used to be with the tech in
Speaker 1: the center that is now replicated on a screen digitally,
Speaker 1: and then there's a screen in the dashboard. So this
Speaker 1: truly is the most you could definitely argue it's the
Speaker 1: most modern version of the nine to eleven for sure.
Speaker 1: It's like pure screens now. Obviously this goes back to
Speaker 1: just what we were speaking about before with the whole
Speaker 1: I'm not convinced screens are going to age amazingly well,
Speaker 1: and I know that I'm not the only one, because
Speaker 1: Bentley just announced that their Sharon successor, the Turbion, very
Speaker 1: deliberately is mostly analog on the inside, and it's because
Speaker 1: they think that this car will look better on concor Lons,
Speaker 1: you know, fifty years from now with analog gauges rather
Speaker 1: than computer screens. That I kind of agree.
Speaker 2: I mean, look, this isn't another case of corporate decisions
Speaker 2: that are good for the bottom line in quarterly earnings
Speaker 2: but are bad longer term. You know that Oliver Blooma
Speaker 2: also knows screens aren't gonna age. Well, you know that
Speaker 2: Frank also knows that screens aren't going to age. Well.
Speaker 2: Everyone knows that screens aren't gonna age well because they
Speaker 2: never have. Look back at cars that have screens in
Speaker 2: the last ten or twenty years, and they look horrible.
Speaker 2: And Portia knows they're gonna look horrible in the future,
Speaker 2: but they put them in to sell them now and
Speaker 2: to make the bottom line the quarterly earnings look better.
Speaker 2: And I just think they'll rue. Well, no, I don't
Speaker 2: think they'll rue that decision. The buyers will. And but
Speaker 2: it doesn't matter because as long as the stock does well,
Speaker 2: I'm not complaining about capitalism.
Speaker 1: But well, and you know what, the car drives amazing.
Speaker 2: I'm sure it's phenomenal.
Speaker 1: Now.
Speaker 2: The thing is that Porsia never had a problem with
Speaker 2: responsiveness anyway. But in the Corvette, the edition of the
Speaker 2: electric motor and on the Corvette is on the front axle,
Speaker 2: really helps it instantly accelerate. Porsia already did that. But
Speaker 2: do you not hear any of the electric motor at all?
Speaker 2: Do you not hear any of the sort of fighter jet.
Speaker 1: Were Honestly, I did not. Maybe when you get in
Speaker 1: the car you will hear it. I truthfully did not
Speaker 1: hear it. I don't know if I could have gotten
Speaker 1: in and without seeing anything known that I was in
Speaker 1: a hybrid. I didn't you know, maybe you'll get in
Speaker 1: here something that I didn't hear, but no, it's it's
Speaker 1: really imperceptible.
Speaker 2: I have been.
Speaker 1: And let's not forget this is a mild hybrid. It's
Speaker 1: not a plug in. There's no electric only driving, So
Speaker 1: you know, it really is a very very subtle change,
Speaker 1: a subtle advance, if you will.
Speaker 2: All right, So I just want to finally ask about
Speaker 2: the biggest omission of all and hear your take on it.
Speaker 2: Because the GTS was the trim line that you could
Speaker 2: get with a stick shift, That was the true driver's car.
Speaker 2: Someone who cares about driving a car really and doesn't
Speaker 2: want to use flappy paddles went for the GTS so
Speaker 2: that he didn't have to or she didn't have to
Speaker 2: have the turbocharged engine and the automatic transmission. Now, Portia
Speaker 2: is not offering any stick shifts in the twenty twenty
Speaker 2: five model line, and definitely not in the GTS, not
Speaker 2: even next year in the GTS. Right, it's not coming,
Speaker 2: not in the GPS, not in the GTS. So how
Speaker 2: do you think that does for this trim level which
Speaker 2: you chose for the stick.
Speaker 1: Well, times are changing now. The trim level is the
Speaker 1: hybrid thing there. I asked them about that too, they,
Speaker 1: of course, a just wait, you know, there are other
Speaker 1: variants coming out, there are other things happening, just wait,
Speaker 1: just wait. So I do. I do. I'm fully confident
Speaker 1: that we'll have other opportunities to be in manual nine
Speaker 1: to ninety two dot two vehicles, if you ask my opinion, Yeah,
Speaker 1: it'd be nice just to have the option of a manual,
Speaker 1: just like we always say. But honestly, frankly, I have
Speaker 1: at least I can say I don't need a manual.
Speaker 1: And I'm assuming that probably most drivers who drive an
Speaker 1: hour to work every day, if they're driving there nine
Speaker 1: to eleven for that purpose, I'm sure that they're very
Speaker 1: happy to have those flappy paddles.
Speaker 2: Yeah, I guess commuters. Maybe commuters. I just know that
Speaker 2: I have usually more fun in a manual.
Speaker 1: For sure. I do. Well. I love the st I
Speaker 1: mean that was like my favorite car, but.
Speaker 2: Of course you have to have one to be on
Speaker 2: a list, and all right, So yeah, I think I
Speaker 2: like the design the nine nine to two point two
Speaker 2: a lot, so I think it looks better than the
Speaker 2: nine nine to two point one, but I like it. Yeah,
Speaker 2: so all right awesome. You should check out on Bloomberg
Speaker 2: dot com Hannah's article on the new nine to eleven
Speaker 2: GTS after she got to go to Marbia to drive it.
Speaker 2: I want to quickly talk about these two roadsters because
Speaker 2: I had, please, I think, pretty high hopes for the
Speaker 2: Mercedes AMG SL sixty three sixty three, and in some
Speaker 2: ways it delivers. I mean, it's an extremely powerful V
Speaker 2: eight that sounds amazing. Obviously there's no stick available for
Speaker 2: this either, because Mercedes has just abandoned that customer. But
Speaker 2: it's like the same as the GT now. You know,
Speaker 2: the AMGGT is just the hard top version and the
Speaker 2: SL sixty three is the ragtop. I like a ragtop.
Speaker 1: You know.
Speaker 2: They both have four seats unless you option the back
Speaker 2: seat out. They both have all wheel drive now, which
Speaker 2: they never had before, and I like all wheel drive.
Speaker 2: I don't mind if it's heavy. It's a grand tour.
Speaker 2: It's not supposed to be a sports car. But I
Speaker 2: will say the price, at over two hundred thousand dollars,
Speaker 2: I'd probably rather have a Porsche. And the responsiveness is
Speaker 2: not there. There's like a for some reason, just a
Speaker 2: ton of turbo lag. You put down the pedal and
Speaker 2: you can start counting before the engine spurs, spools up
Speaker 2: and goes and then everything is operated by the screen.
Speaker 2: And I don't know why they do this. I guess
Speaker 2: because they start designing the car five years ago and
Speaker 2: then they come out with it last year. But like
Speaker 2: even the putting the top up and down, you pretty
Speaker 2: much have to use the screen. I figured out a
Speaker 2: cheat if you double push a button, you can do it.
Speaker 2: But it's it's not great in that sense, but you know,
Speaker 2: for I mean, I'm not gonna be disapointed with two
Speaker 2: hundred thosand dollars car. Right, it's luxury. I mean it's luxury.
Speaker 2: I mean seat leather. Yeah, the design looks great.
Speaker 1: I mean is the best, the most luxurious interiors of
Speaker 1: you know, before you get into Rolls Royce range.
Speaker 2: It wasn't for me comfortable, but I have a weird
Speaker 2: maybe bird body type of the seats. I'm just not
Speaker 2: getting a lot of leg room. And I was more
Speaker 2: comfortable in the Corvette, which is a weird thing to say.
Speaker 2: And also, by the way, don't ever test drive a
Speaker 2: sports car or a GT car after you drove the
Speaker 2: Corvette E Ray because that thing was more responsive, like
Speaker 2: it was accelerating before my foot touched the pedal, and
Speaker 2: this thing and anything else isn't compared to that. But yeah,
Speaker 2: so I still really enjoyed driving it for a week.
Speaker 2: But then last night I got into this Ford Mustang.
Speaker 2: Not even the dark Horse. It was the GT the convertible,
Speaker 2: not even the manual transmission. I don't know what the
Speaker 2: PR is thinking when they give a journalist, you know,
Speaker 2: the automatic. But it's cool that I got to compare
Speaker 2: it back to back with the Mercedes because they're both automatic.
Speaker 2: As I said, two door four seaters with V eights.
Speaker 2: It was a blast. It's so much fun and it
Speaker 2: only costs sixty thousand dollars.
Speaker 1: Wow.
Speaker 2: The sound is much more offensive in a good way,
Speaker 2: like a high schooler would be super psyched to drive
Speaker 2: this car. The top goes down like faster and easier,
Speaker 2: less complicated.
Speaker 1: It just sounds simple and easy.
Speaker 2: Because it's meerwheel drive. I could break the back wheels
Speaker 2: loose on every you know, highway entry and exit. It's
Speaker 2: just like a hooligan's car. And I also take over
Speaker 2: you with it. I take issue with people now who
Speaker 2: say it's just a sports car. The Mustang, it's no
Speaker 2: longer a muscle car. It really feels muscle like you
Speaker 2: can feel the engines in the front. It's it's a
Speaker 2: heavy vehicle. I think it's like a four thousand pound vehicle.
Speaker 2: And it's like cheap and fast.
Speaker 1: How is the sound system?
Speaker 2: The sound system on both is okay? Now that one's great.
Speaker 2: The Mercedes has the Burmester and people rave about it,
Speaker 2: but it's not that great, frankly, and and on the Mustang,
Speaker 2: it's the first time that I really felt like, yes,
Speaker 2: I don't mean to listen to the radio because I
Speaker 2: only want to listen to the motor. Like why this
Speaker 2: morning I drove to work, it was raining, I still
Speaker 2: put the top down and didn't listen to the radio
Speaker 2: on my commute.
Speaker 1: I think you just unlocked another level. I think you
Speaker 1: just reached another It.
Speaker 2: Could be I usually I hate it when people say that,
Speaker 2: you know, because I like a good stereo, and I'm
Speaker 2: sure if I live with the car and want a
Speaker 2: good stereo, and to be honest, almost no factory stereo
Speaker 2: is good, so I'm sure it's not that great. But
Speaker 2: the vehicle is just a blast to drive. It makes
Speaker 2: you feel like a little kid again, is the thing.
Speaker 2: It makes me, fifty year old man Miller, feel like,
Speaker 2: you know, an eighteen year old kid.
Speaker 1: Yeah, you're smiling, and there is something to be said
Speaker 1: for you can get a whole lot of car and
Speaker 1: have it. Sounds like just as much fun with something
Speaker 1: a lot cheaper and a lot simpler and just something
Speaker 1: just easy. So why, I mean, why go through the
Speaker 1: expense of getting the big expensive thing I can relate to.
Speaker 2: That I don't know perfect sense, And frankly, now that
Speaker 2: I've driven both, when I see somebody in a Mercedes
Speaker 2: AMGSL sixty three, I'm gonna be kind of making a
Speaker 2: character judgment.
Speaker 1: You know.
Speaker 2: Oh boy, you could have had maybe more fun spending
Speaker 2: sixty grand, but you felt it necessary to spend two
Speaker 2: hundred and nine thousand dollars.
Speaker 1: Uh.
Speaker 2: The suspension is another thing that I mean. It's not
Speaker 2: amazing on the Mustang GT either, but I thought it
Speaker 2: was gonna be insane. On the Mercedes AMG SL sixty three,
Speaker 2: it was bouncy.
Speaker 1: You know.
Speaker 2: I go to work at five in the morning, so
Speaker 2: I fly down the Bronx River Parkway and then even
Speaker 2: faster down the west Side Highway and okay the roads.
Speaker 1: Now, were you in the right were you in sport mode?
Speaker 1: Sport plus?
Speaker 2: I mean our sport Plus than track. I was only
Speaker 2: in Sport Plus and track to make sure Mercedes. Yeah,
Speaker 2: and you know, I don't stay in track because that
Speaker 2: keeps the gears really low when you don't need it.
Speaker 2: So Sport plus is I find it good. But the
Speaker 2: suspension was just bouncy, bouncy, bouncy in that car, and
Speaker 2: I was surprised because I thought it was gonna be
Speaker 2: much better in the Mustang. I didn't have such high expectations,
Speaker 2: you know.
Speaker 1: You know the counterpoint to that is if you were
Speaker 1: just coming out of a Corvette, that is a pretty
Speaker 1: stiff suspension and a pretty stiff car, so probably to
Speaker 1: get into anything would feel rather That's true.
Speaker 2: I thought about that as well. But the Corvette suspension
Speaker 2: is so good that you don't it's it's not bouncy
Speaker 2: and it's not too jarring, you know, it's not. I
Speaker 2: I wasn't breaking teeth in it, so it's not like
Speaker 2: my you know, my neighbor has this BMWM for gts
Speaker 2: that thing like if you even think about hitting a
Speaker 2: speed bump. It hurts already. You feel like you might
Speaker 2: have broken something in the car, or like a nine
Speaker 2: to eleven GT three. Right, you don't want to You
Speaker 2: don't want to be in that car on a regular
Speaker 2: basis if you value your spine. It was perfect.
Speaker 1: No, I need to change the subjects a little bit
Speaker 1: and ask you a very pressing question. Yes, this has
Speaker 1: to do with spying used cars, or you know, more
Speaker 1: euphemistically vintage cars. I found myself out at Beverly Hills
Speaker 1: Car Club, which is neither in Beverly Hills nor car club.
Speaker 1: It's out in.
Speaker 3: Oh yeah, oh my god.
Speaker 2: I've always no, I've always thought that's like the Manhattan
Speaker 2: Classic Car Club. I've always thought that people gather that
Speaker 2: love cars and test different vehicles.
Speaker 1: Oh no, no, no, these these cars are very much
Speaker 1: caveat and tour vehicles. You you have to assume all
Speaker 1: risk when you go there. Just fun.
Speaker 2: Twenty years I've been looking at cars from and I thought, Wow,
Speaker 2: they have such a good collection. The members must really
Speaker 2: appreciate it.
Speaker 1: Yeah. Yeah, this question goes right in line with what
Speaker 1: I'm trying to say, is I did see a very
Speaker 1: cool Rolls Royce variant there and priced to sell. The
Speaker 1: one thing is the trunk doesn't open. So how do
Speaker 1: you feel about purchasing a vehicle priced accordingly? I should say,
Speaker 1: but the trunk doesn't open? And this brings up too things.
Speaker 1: What's in the trunk? Number one and number two? Are
Speaker 1: you gonna want some storage space in that trunk at
Speaker 1: some point?
Speaker 2: But I mean, don't you think you would eventually be
Speaker 2: able to open the trunk? Can you get into a
Speaker 2: roll trunk through the back seats or no?
Speaker 1: I don't think so. No, not this one. I mean yes,
Speaker 1: once once purchased, I could, you know, take it down
Speaker 1: to Charlie and see if you can crack it open.
Speaker 2: I mean, I wouldn't care if it's priced accordingly. The
Speaker 2: trunk opening is the least of my worries in buying
Speaker 2: a car like that. I would be much more concerned
Speaker 2: about the maintenance cost. What are you gonna have to repair?
Speaker 2: How much is it going to cost you to run
Speaker 2: every year? The trunk I don't even care. Like, you
Speaker 2: have a big backseat and you don't have any body
Speaker 2: necessarily a put back there except for the dogs, So yeah,
Speaker 2: I think you.
Speaker 1: Know, I kind of like looking in the trunk though,
Speaker 1: and pulling up the upholstery to look, you know, to
Speaker 1: see what's been spray painted.
Speaker 2: Over and what has Oh, you're a good car.
Speaker 1: Bin trusted or you know what has been quote unquote fixed.
Speaker 1: You know, it is a really good indicator if there's
Speaker 1: been any incidents in the car? Is there bondo? You
Speaker 1: know that sort of thing. So there's a little bit
Speaker 1: of a risk, right, But you're saying, never mind.
Speaker 2: That, I wouldn't bother me. I would probably tell the
Speaker 2: good people that run the Beverly Hills Car Club, I
Speaker 2: would like to buy this car. Can you is there
Speaker 2: any way for you to figure out how to open
Speaker 2: the trunk?
Speaker 1: Like?
Speaker 2: Can we get a crow bar and pry this baby open?
Speaker 1: Because let's figure it out together.
Speaker 2: I saw another suitcase of money or drugs. Stephen, did
Speaker 2: you read the Key Bard's autobiography.
Speaker 1: Life, My Life Life?
Speaker 2: Yes, it's an amazing story. And he gets pulled over
Speaker 2: in a car that's packed with cocaine and the cops
Speaker 2: don't even get to it.
Speaker 1: Bentley, what didn't he drive? Did? He's say in that
Speaker 1: book A Bentley saved his life multiple times because he
Speaker 1: crashed it.
Speaker 2: He would crash him and he did. But the car
Speaker 2: he was driving across the US when he got pulled over,
Speaker 2: like in the middle of the country with a drug
Speaker 2: filled vehicle was not a Bentley, and he actually, I
Speaker 2: think got out of it because the judge was a
Speaker 2: Stones fan. But I highly recommend that book, especially for
Speaker 2: car people, because there's a lot about hicles. The Beverly
Speaker 2: Hills Car Club also had a Bentley Continental R, which
Speaker 2: you know I lost after those I think it was
Speaker 2: nineteen ninety three. Those at the time was I think
Speaker 2: the most expensive car you could buy, and it looked
Speaker 2: beautiful to me, only twenty two grand, but that's probably
Speaker 2: gonna because it's going to cost you like fifty a
Speaker 2: year to run. I noticed in that one also, there
Speaker 2: were actually holes cut in the trunk. Did you see that?
Speaker 1: No? I didn't. I didn't look through all the photos. No, yeah, no.
Speaker 1: And I didn't open the trunk on that one either.
Speaker 1: I did see that car, of course, but no. So
Speaker 1: that's interesting.
Speaker 2: All right, Well, I learned a lot today. Let's learn
Speaker 2: a little bit more about Rivian. We have Bloomberg Business
Speaker 2: Week reporter Max Chafkin. He's going to join us talk
Speaker 2: about his story with Ed Ludlow on Rivian.
Speaker 1: Let's listen in Max, it's so good to have you here.
Speaker 1: You wrote a really fabulous story about Rivian, and really
Speaker 1: I thought put into great relief how Rivian has emerged
Speaker 1: as kind of the antithesis to Tesla, and maybe even
Speaker 1: r J is the antithesis to Elon and I think too.
Speaker 1: We've talked about how there's a product story and there's
Speaker 1: a business story. So I'd love to just hear from
Speaker 1: you how you see that play out for Rivian.
Speaker 3: Look coming from the outside, and I am not. I'm
Speaker 3: not like even a car person, although I do own
Speaker 3: two cars. But you know, from my point of view,
Speaker 3: coming from the outside of this story, you have kind
Speaker 3: of a product story and a stock story, and that's true.
Speaker 3: I actually had Tesla as well. But you know, the product,
Speaker 3: this luxury pickup truck and very large suv, you know,
Speaker 3: has built a sizeable following. I think you know that
Speaker 3: you can debate, like how good is it on its
Speaker 3: own terms? Is it really a good value? But like
Speaker 3: they're selling actually like a substantial quantity of these things
Speaker 3: selling more than you know, comparative cars. You know, it's
Speaker 3: like it's like a solid business in a lot of ways.
Speaker 3: It has fans. There's this interesting culture of fandom where
Speaker 3: you have lots of like kind of disaffected Tesla owners,
Speaker 3: people who own a Tesla but are really excited about
Speaker 3: a Rivian because because it doesn't necessarily come with all
Speaker 3: the baggage of Elon Musk or whatever. And then you
Speaker 3: have a stock story and a business story that has
Speaker 3: just been essentially disastrous for years. Right this this is
Speaker 3: a company went public twenty twenty one, I think in
Speaker 3: retrospect kind of the very height of the kind of
Speaker 3: pandemic fueled bubble in evs. For like a hot second
Speaker 3: there in like November twenty twenty one, it was the
Speaker 3: most valuable or second most valuable car company in the
Speaker 3: United States, and it just has gone like pretty much
Speaker 3: straight down until very recently striking this deal with Volkswagen.
Speaker 3: But even even with the deal that has struggle with Volkswagen,
Speaker 3: the stocks still down like ninety percent. It's been a disaster,
Speaker 3: which is kind of interesting because you know, on one hand,
Speaker 3: you would think that like Elon Musk going out there
Speaker 3: and kind of making a fool of himself on social
Speaker 3: media and doing all sorts of things that have undermined
Speaker 3: Tesla that that would create a real opportunity for Rivian,
Speaker 3: and it has, although I don't know that Rivian has
Speaker 3: fully managed to take advantage of that opportunity just yet.
Speaker 2: Well, they can't, like because they can't a they can't
Speaker 2: produce as many cars. Let's put some numbers on it, right,
Speaker 2: Tesla is gonna sell roughly two million cars this year, right,
Speaker 2: Rivian is gonna sell what like fifty.
Speaker 3: Thousand something like that. Yeah, and now I think it's
Speaker 3: slightly or of what they would say is, oh, it's
Speaker 3: it's actually not quite as bad as it sounds because
Speaker 3: we had to shut down the factory for retooling. Of course,
Speaker 3: Tesla has lots of excuses that they offer like that,
Speaker 3: but yeah, it's essentially like, but they'll sell maybe fifty
Speaker 3: sixty tops totally.
Speaker 2: Last year they sold fifty sixty tops yep. And Tesla's
Speaker 2: gonna sell two million, give or take. Last year they
Speaker 2: sold two million give take By the way, uh, Tesla's
Speaker 2: worth nine hundred billion dollars. Rivian at its height was
Speaker 2: worth one hundred and fifty billion dollars and they've been
Speaker 2: literally decimated. Like the definition of that, They're worth one
Speaker 2: tenth of what they had been.
Speaker 1: So I mean, so why the space between they do
Speaker 1: have a fan base and the stock. Why is there
Speaker 1: such a big divide?
Speaker 2: I have to think part of it, max is that
Speaker 2: they just can't make enough. Like if they could make more,
Speaker 2: they could sell more. So production is a huge problem
Speaker 2: for well, Okay, so.
Speaker 3: I think there are I think really and this is true,
Speaker 3: I mean, doing the story and you know, I also
Speaker 3: we post a podcast elon Ink which we talk about
Speaker 3: this every every week. It's a sister podcast, if you will,
Speaker 3: of Hot Pursuit. Sorry to get the plug in, I like,
Speaker 3: but but anyway, we talk about this all the time,
Speaker 3: and I think really like the ev market, like everyone
Speaker 3: kind of agrees, policymakers, governments probably like some there's some
Speaker 3: auto automotive enthusiasts who would beg to differ, but like,
Speaker 3: essentially this is the future, Like all the cars are
Speaker 3: going to go this way, you know, by twenty thirty
Speaker 3: or whatever in certain states and local localities, like you're
Speaker 3: not gonna be able to sell a conventional car.
Speaker 2: And we hope that's not true and that those things change. Yeah, no, clear.
Speaker 3: My point is though that's the goal. A lot of
Speaker 3: people kind of agree on that goal. But like getting
Speaker 3: there we are. There's a golf and the golf is
Speaker 3: essentially affordability, and like I think, what what happened with Rivian? Yes,
Speaker 3: the production issues are problem and that's part of the
Speaker 3: reason they're losing so much money. Is that they have
Speaker 3: this like giant factory that's an old Mitsubishi factory in
Speaker 3: central Illinois, and and like it's it has a capacity
Speaker 3: of one hundred and fifty thousand vehicles. They're making fifty sixty.
Speaker 3: Like you said, that's creating losses. But the real problem
Speaker 3: is they're selling a seventy minimum seventy thousand dollars you know,
Speaker 3: three row suv and there is just like a limited
Speaker 3: audience in a world with high interest rates and where
Speaker 3: there's you know a bit of a backlash against evs,
Speaker 3: where you know, I think about this my own life,
Speaker 3: right because like I drove, you know, I drove the
Speaker 3: truck and I think it's awesome. I think it's I
Speaker 3: think it's cool. It made me want to maybe maybe
Speaker 3: want to drive it. Maybe you know, it can accelerate
Speaker 3: really fast, Like I again, like.
Speaker 2: I'm not it's luxurious.
Speaker 3: Yeah, you know, it reminded me, No, it's not. This
Speaker 3: is gonna Okay, this is gonna. I'm gonna reveal you
Speaker 3: didn't want to talk about the product. Okay, I'm gonna.
Speaker 3: I'm gonna talk.
Speaker 1: About the product. I just didn't want to start with that. Okay.
Speaker 3: Well, I have a point here, which is essentially though
Speaker 3: when I actually started thinking about it, you know, you're
Speaker 3: talking about, like I said, minimum seventy thousand, so probably
Speaker 3: more like eighty whatever, eighty five. There's gonna be some
Speaker 3: tax credits, but like this is a big chunk of change,
Speaker 3: and you could get a really nice, brand new Lexus
Speaker 3: for like twenty thousand dollars less than that, and with
Speaker 3: you know that also has three rows, and that is
Speaker 3: a Toyota product. It's gonna be easy for you know.
Speaker 3: And it's just like even if you're in.
Speaker 2: There with a gas engine, to be clear, yeah, with
Speaker 2: a gas engine.
Speaker 1: Yeah.
Speaker 3: But but I mean the point is just that like,
Speaker 3: unless you are the kind of like early adopter, you're
Speaker 3: going for this no matter what.
Speaker 2: They just haven't been affordable enough.
Speaker 1: Yeah. I would say, just because something is priced like
Speaker 1: a luxury product doesn't mean that it actually is a
Speaker 1: luxury product. And just because it has a lot of
Speaker 1: tech doesn't mean it's a luxury product.
Speaker 2: Yeah, what it is a luxury product. And when you
Speaker 2: think of a luxury product, I.
Speaker 1: Would say when when materials are what they seem to be.
Speaker 1: For instance, leather is real, leather, chrome is real chrome,
Speaker 1: wood is real wood. When they're handmade in small batches
Speaker 1: or smallish batches, and when they're well made, when the
Speaker 1: fit and finish is very well made, when there are
Speaker 1: no body panels that don't align, when you know you
Speaker 1: can't pull the covering on the B and C pillars
Speaker 1: literally down, when something is well made for starters.
Speaker 2: I like that. I like that definition. Put Max, I'm
Speaker 2: with you. I think this is a luxury vehicle just
Speaker 2: because the design is so special, it's so powerful. There's
Speaker 2: an exclusivity because EI there difficult to afford for most people,
Speaker 2: and b you just can't get them. There's a long
Speaker 2: waiting list and features they have features I know, I'm
Speaker 2: I'm not so this is anyway. I think it's cool.
Speaker 2: May maybe that's a better way.
Speaker 1: Doesn't mean luxury exists outside of the luxury world for sure,
Speaker 1: And just because they can't make enough doesn't make them exclusive.
Speaker 1: It just means Rivian can't make enough.
Speaker 3: But the way I think of it, right, is that
Speaker 3: for a long time, the narrative from Elon Musk, even
Speaker 3: like Bob Lutz, you know, former CEO of GM, who
Speaker 3: was big proponent of EV's, Like the idea was evs
Speaker 3: are are going to be a complete change from the
Speaker 3: automotive status quote because they are fundamentally software products. They're
Speaker 3: not gonna be like cars. You're gonna you're only gonna
Speaker 3: care about the software that's in it. And and like
Speaker 3: I remember like working at it, working at magazines and
Speaker 3: being involved in articles where were like the car is
Speaker 3: the new iPhone and you see that.
Speaker 1: Well, Elon said that told me that in person, you know,
Speaker 1: when he still was driving around with early prototypes, right,
Speaker 1: and I thought he was I didn't really hit it.
Speaker 3: Well, you can understand why that's a good story for investors,
Speaker 3: because iPhones are you know that the software business is
Speaker 3: like way better than the car business. Software valuations are
Speaker 3: way better than automoble evaluation. So if that turns out
Speaker 3: to be true, right, Tesla is worth you know, gazillion dollars.
Speaker 3: Like Kathy Wood, you know, you're talking like Kathy would
Speaker 3: potentially like thirty trillion dollars. I think that's that's the latest,
Speaker 3: you know, the latest, kind of like pie in the
Speaker 3: Sky thing.
Speaker 2: Has she said thirty trillion?
Speaker 3: Yeah? Yeah. Elon is always like when I think about
Speaker 3: what the you know, best valuation is, it's the it's
Speaker 3: the Kathy Wood thing. I mean, we should check the numbers,
Speaker 3: but pretty sure thirty trillion. But anyway, Rivian's bet is
Speaker 3: is different. Rivian's bet is that the car industry of
Speaker 3: the future is gonna look a lot like car industry
Speaker 3: of the past. They're gonna be different, different demographics, different styles.
Speaker 3: There's gonna be a Jeep equivalent. There's gonna be the
Speaker 3: Jeep of EV's or the Subaru of EV's, And to
Speaker 3: my mind, like that's what they're trying to build. When
Speaker 3: you look at like what the branding is it, it
Speaker 3: looks like the way that Jeep or super U are
Speaker 3: marketing products. And there's even you know, I got I
Speaker 3: got kind of like into the sort of Rivian fan
Speaker 3: community because it's so funny. It's like a funny in
Speaker 3: version of the Tesla fan community. Imagine like the typical
Speaker 3: cyber truck driver. It's like total like Alpha bro super
Speaker 3: into technology, super into self driving, you know, just and
Speaker 3: like the Ribban people are like a little bit boring.
Speaker 3: They're like, yeah, they got their fleece.
Speaker 2: Maybe, but anyway, I think like both camps are wearing Patagonia.
Speaker 2: They are just different because one is a programmer and
Speaker 2: the other one is like a regional banker.
Speaker 3: But like the thing Rivian, so you know, like the
Speaker 3: jeep wave, right, there's a Rivian equivalent. They wave at
Speaker 3: each other and they can't even help themselves. It's just
Speaker 3: like it's just.
Speaker 2: Like the thing.
Speaker 3: And and I think like that is pretty astute, honestly
Speaker 3: of Rivian. And it actually shows like if Elon Musk's
Speaker 3: bet on the future of the automotive industry is correct,
Speaker 3: then great, it's gonna be then like he's totally gonna
Speaker 3: pay off this valuation. But I think it's a high
Speaker 3: risk bet and more likely it's it's the Rivian thesis
Speaker 3: is gonna be the one that plays out and.
Speaker 2: If that has survive, Yeah, the one problem.
Speaker 3: With that is if that happens, like Tesla's worthway less,
Speaker 3: Like the the the the ceiling is a little bit lower,
Speaker 3: and that makes it that makes it harder for Rivian.
Speaker 3: They're trying to compete in you know, in a business
Speaker 3: that is cutthroat where there's lots of competition, where where
Speaker 3: it's not like it's not just Tesla and Rivian. There
Speaker 3: are lots of other uh, really solid evs either on
Speaker 3: the market or about to hit the market. So that's
Speaker 3: a challenge. Although I think.
Speaker 2: In terms of non incumbents, there isn't really another competitor
Speaker 2: that's made a substantial amount of vehicles.
Speaker 3: No, no, there, And and when you look at the
Speaker 3: thing is they get lumped in with like Lucid and Fisker,
Speaker 3: like canoe companies that are either like like in like
Speaker 3: literally te Fisker's bankrupt. Lucid is around, but it's like
Speaker 3: largely around thanks to the you know largest the Saudi.
Speaker 2: They both they both well Rivian had it, Saudi large
Speaker 2: s too.
Speaker 3: So okay, but let me talk about Yeah, we should
Speaker 3: talk about let's get let's.
Speaker 2: Get the origin story. I think that's a cool part
Speaker 2: of reporting.
Speaker 3: Thing about this is like Rivian, it is an this
Speaker 3: is an unlikely story, and I mean it's it's easy
Speaker 3: to like see this, you know, he sort of looks
Speaker 3: like a typical kind of programmer type or something. He's like,
Speaker 3: you know, sort of like an attractive white man of
Speaker 3: about forty years old who went to MI T. This
Speaker 3: is an unlikely story, uh r. J. Scurriinge basically was
Speaker 3: like stringing it together for many years, pivoting between.
Speaker 1: Various mainstream motors.
Speaker 3: Yeah, it was mainstream motors, Mastream motors. By the way,
Speaker 3: his his father is an engineer and an entrepreneur, runs
Speaker 3: a company that's like mainstream engineering or something. It's a
Speaker 3: defense contractor. So you know, his his main his original
Speaker 3: investor was his father, their Saudai investor. It's it's not
Speaker 3: quite as glamorous as the public investment fund.
Speaker 2: It is true.
Speaker 3: It is a company best known for operating Toyota dealerships
Speaker 3: in Saudi Arabia, which looks like, I mean, I've never
Speaker 3: been in Saudi Arabia, but I'm in the Middle East.
Speaker 3: And if you have that Toyota franchise, yes, that is
Speaker 3: a valuable that is a valuable thing. But you know,
Speaker 3: it's like it was like an MIT connection. It wasn't
Speaker 3: you know. This is a company that really strung it together,
Speaker 3: just barely. And I mean the way it's it's pretty funny.
Speaker 3: I mean they part of the reason they had this
Speaker 3: really successful launch in twenty eighteen. I think part of
Speaker 3: it was the design, like you brought it up. It's
Speaker 3: it's I think it's polarizing, Like I don't totally love it.
Speaker 3: In fact, a lot of people who like Rivian are
Speaker 3: not like exactly crazy about the front end, but it's memorable.
Speaker 1: Polarizing is good really for car design. Yeah, at least
Speaker 1: you have at least folks reacting to.
Speaker 2: Talk about it.
Speaker 1: Totlarizing is better than yeah.
Speaker 3: And but anyway, Rihanna came to the launch. Why did
Speaker 3: Rihanna come to the most Well, she was dating the
Speaker 3: son of the Saudi car dealer. They've broken up, by
Speaker 3: the way.
Speaker 2: Uh but uh but you know, like that she did
Speaker 2: her part.
Speaker 3: And and like, okay, Rivian gets this investment from Jeff Bezos. Well,
Speaker 3: we don't know exactly the chain of events that led
Speaker 3: to that investment, but I can tell you that Rivin
Speaker 3: hired a production company. Production company had some connections to Jeff.
Speaker 3: The production company hired Lauren Sanchez, Bezos's uh, you know, girlfriend,
Speaker 3: to do some aerial photography and by.
Speaker 2: Dude, jack of all trades, Lauren Sanchez. I thought was
Speaker 2: like a journalist and a television reporter. Turns out she
Speaker 2: does aerial photography.
Speaker 3: That that's that was the business this I believe. Now
Speaker 3: again I'm speaking out of at attorney here, but I
Speaker 3: believe that's how she and she and Jeff Bezos is
Speaker 3: the helicopter pilot. Yeah, helicopter pil is awesome. She was
Speaker 3: doing I think doing the same thing for Blue Origin.
Speaker 3: But but in any case, you know, Bezos finds out
Speaker 3: about this and and really becomes you know, the key back.
Speaker 3: I mean, that is a thing that sends Rivyan essentially
Speaker 3: stratospheric because not only did Bezos put a huge amount
Speaker 3: of money in the company, but made this big order
Speaker 3: one hundred thousand delivery vans. They haven't delivered all of
Speaker 3: those yet, by the way, but like becomes both a
Speaker 3: sort of uh, you know, Keystone customer and and the
Speaker 3: beginning investor. And company goes public and as I said,
Speaker 3: you know, just manages to raise a ton of money.
Speaker 3: But kind of like the same factors that were sort
Speaker 3: of propelling Rivian to be able to tell this investor
Speaker 3: story also worked against it. So part of the reason
Speaker 3: Rivian did well because cars were really expensive, Like a
Speaker 3: Toyota camera is like selling for more than forty thousand dollars.
Speaker 3: So and interest rates are zero, So like who cares?
Speaker 3: Like yolo, Like why buy seventy thousand dollars pickup truck?
Speaker 2: Why not?
Speaker 3: Now? Of course, the reason those cars were so expensive
Speaker 3: is that semiconductors are really hard to come by. R
Speaker 3: J had overpaid for almost everything. He had overdesigned these trucks,
Speaker 3: you know, love or hate them, Like when you look
Speaker 3: at people did tear downs and like it was constructed
Speaker 3: in a very expensive way. There are all these like
Speaker 3: little add ons that I think helped contribute to the
Speaker 3: sort of memorability or whatever of this of the truck,
Speaker 3: but but ultimately made it very expensive to manufacture. And
Speaker 3: they priced it, you know, basically before they realized like
Speaker 3: how much it was gonna cost. So they were just
Speaker 3: like selling these things, losing tons of money, and then
Speaker 3: unable because of the semiconductor short to really get ramped
Speaker 3: up as quickly as they wanted. And so you have
Speaker 3: a company that is essentially burning through like five billion
Speaker 3: dollars a year, which is a lot. I mean I
Speaker 3: haven't gone back and looked like how much did Tesla
Speaker 3: burn when they were making the Model S. But it's
Speaker 3: kind of like the burn you would expect for like
Speaker 3: a mass market vehicle, not a kind of niche vehicle.
Speaker 2: Right, Ford lost less on their EV business.
Speaker 3: So yeah, so they had some I think some real
Speaker 3: like undeniable success, especially when you look at like how
Speaker 3: hard it's been for like every other one of these
Speaker 3: EV startups to build any kind of following. Like Fisker
Speaker 3: had a lot of legs up. While he's like a
Speaker 3: famous designer, he's been in the industry for a very
Speaker 3: long time, like really struggling, like all these all these
Speaker 3: startups up starts, like really struggling to get any kind
Speaker 3: of traction. Rivian gets traction, but at just a crazy
Speaker 3: high price. Like one thing you can say about rj
Speaker 3: and Rivian like this is a spendee company. It is
Speaker 3: not like Elon Musk is really frugal, and and you
Speaker 3: know it comes out in all sorts of ways that
Speaker 3: are destructive and problematic. Rivian Rjie I think believed that
Speaker 3: you know this, the company needs to sort of overperform.
Speaker 3: It needs to be better than you expect, it needs
Speaker 3: to be nicer than you expect. When you these Rivian
Speaker 3: stores are really expensive and nice, and it's it's very
Speaker 3: different from a lot of things Tesla did. And you know,
Speaker 3: as a result, like behind the scenes, starting last year,
Speaker 3: there's this like kind of frantic attempt to either uh,
Speaker 3: raise more money or cut costs or or all of
Speaker 3: those things, Like they looked at the federal government. And
Speaker 3: then we wind up finally, you know, with this Volkswagen deal,
Speaker 3: which really is a lifeline, and I think.
Speaker 1: That saved them completely. I mean, can we let's talk
Speaker 1: about how massive.
Speaker 2: That Yeah, did it save them completely or is it
Speaker 2: a lifeline that's going to last a year? I mean
Speaker 2: they still have to.
Speaker 1: Build that really a factory move against Tesla more than
Speaker 1: appreciating what Rivian is doing or could do, Is that
Speaker 1: actually a maneuver to block Tesla? Well?
Speaker 2: I think no.
Speaker 3: I mean I think Rivian, despite having the kind of
Speaker 3: crazy burn rate and despite you know, as as r
Speaker 3: J said, you know, looking out in the future and
Speaker 3: seeing at some point, you know, we're going to run
Speaker 3: out of money, they have something valuable here like that,
Speaker 3: and I think and so.
Speaker 2: They have a lot of liabilities. They have to build
Speaker 2: another factory for five billion dollars, right, well that happened
Speaker 2: to higher six thousand people, like they have more spending
Speaker 2: to do than that Volkswagen lifeline will amount to.
Speaker 3: Yeah, and we reported, you know, we haven't even talked
Speaker 3: about the UAW, but of course the uaw's out there.
Speaker 3: Rivian looks like a pretty successful EV company, especially compared
Speaker 3: to you know, Fisker, and even like some of the
Speaker 3: big automakers, UAW badly wants to unionize those plants. This
Speaker 3: the plan in normal Illinois not unionized, and so part
Speaker 3: of what kind of set off this chain of events
Speaker 3: that led to VW. As we report in the story,
Speaker 3: Rivian had agreed during the good old days to build
Speaker 3: this massive factory in Georgia five billion dollars. Said they
Speaker 3: had huge commitments of sort of jobs they had to
Speaker 3: create to pay for the infrastructure that Georgia was going
Speaker 3: to provide. As these deals often do you know, the
Speaker 3: local government, state government kicks in money, but the private
Speaker 3: employer has to do something. And RJ and Rivian essentially
Speaker 3: tried to apply for a loan from the Department of
Speaker 3: Energy as part of the Inflation Reduction Act. You know,
Speaker 3: Biden administration is as we know, like super excited about
Speaker 3: promoting EVS and but Biden administration also very pro union
Speaker 3: and that's kind of where the hiccup happened. And that
Speaker 3: was part of the decision for RJ essentially to put
Speaker 3: a pause on Georgia and try to do this new
Speaker 3: model in Illinois. He got another big tax incenter in
Speaker 3: Illinois eight hundred or so million, but that was leaving
Speaker 3: this kind of like bomb over the company where at
Speaker 3: some point they're going to run out of money. They
Speaker 3: have these commitments. So that's where kind of Volkswagen comes in.
Speaker 3: And you know, Ed Ludlow, my co writer and I
Speaker 3: we talked to RJ about this, and essentially he's talking
Speaker 3: to everybody, right He's he's trying to you know whatever
Speaker 3: potential partners money, whatever, and has this conversation with Volkswagen
Speaker 3: with the with the new CEO, Oliver Bloom and initially thinks, okay,
Speaker 3: like maybe we're gonna like sell them some technology or something.
Speaker 3: But over the course of you know, some amount of time,
Speaker 3: it becomes clear that Volkswagen is interested in something deeper,
Speaker 3: a real like partnership essentially where Volkswagen is going to
Speaker 3: take Rivian's software and hardware and put it into its vehicles.
Speaker 3: And that's interesting because you know, Volkswagen under the previous
Speaker 3: CEO made this huge bet on EV's and it's kind
Speaker 3: of it has not worked. I think it's it's the
Speaker 3: I forget what it's called.
Speaker 2: ID four.
Speaker 3: The owners of this car are just, uh, you know,
Speaker 3: really complaining a lot about about the software. You know,
Speaker 3: like it's need to reboot, it doesn't work, you know
Speaker 3: EVS as we've talked about our software and and and
Speaker 3: that's despite the fact that they had spent you know,
Speaker 3: a really large amount of money developing their own software
Speaker 3: trying to make this work.
Speaker 2: They spent thirty billion dollars just to start the software unit.
Speaker 2: They earmarked one hundred and eight billion euros between like
Speaker 2: now and twenty twenty eight on EVS.
Speaker 3: So and when I talk about in terms of this
Speaker 3: Rivian deal, I'm not talking about like infotainment software. I'm
Speaker 3: talking about the software architecture and the computers on inside
Speaker 3: of the car. So you know, the thing that tells
Speaker 3: the doors or the seat or the steering or whatever.
Speaker 3: Right cars are are many of these little computers. And
Speaker 3: Rivian had spent a lot of time and money essentially
Speaker 3: aping Tesla Tesla has their own system. Rivian built its
Speaker 3: own system, and I assume, you know, great expense. And
Speaker 3: the idea here is that they're going to license the
Speaker 3: computers and the software to Volkswagen. That's gonna give them
Speaker 3: up to five billion dollars. Now, again, this is a
Speaker 3: partnership between a kind of shaky startup and a very
Speaker 3: old German most German. Yeah, not necessarily like it's gonna
Speaker 3: all work out, but assuming it does, two companies that
Speaker 3: like to spend like drunk, you know, it'll give Rivian,
Speaker 3: you know, a substantial amount of money, five billion dollars,
Speaker 3: which is enough money to at least get that Georgia
Speaker 3: plan open UH and get and they've said get R two,
Speaker 3: the next car into production. I think the hope would
Speaker 3: be to then start getting ready for our three, which
Speaker 3: is the even cheaper version. And for Volkswagen it allows
Speaker 3: them to just like take this stuff and put it
Speaker 3: into their future models. The great thing for Rivian is
Speaker 3: Volkswagen is going to be a lot better at sourcing
Speaker 3: UH semiconductor parts than Rivian, and they're gonna be buying
Speaker 3: essentially from the same pool because it's gonna be a
Speaker 3: joint venture. So so suddenly this gives like Rivian a
Speaker 3: lot more leverage in terms of buying these very expensive,
Speaker 3: very hard to get parts, and that could also help them,
Speaker 3: you know, trim losses going forward. That what they want
Speaker 3: to do is get to profitability by the end of
Speaker 3: the year.
Speaker 1: What do you make of you know, former VW and
Speaker 1: Porsche employees going to Rivian. I know we spoke about
Speaker 1: this briefly. For instance, Kel Gruner, the head of Porsche
Speaker 1: North America, shortly after his departure from Porsche. Now we
Speaker 1: see him at Rivian. How do you assess that type
Speaker 1: of move.
Speaker 3: I don't know, to be honest, my assumption is kind
Speaker 3: of like small world to a type of situation, or
Speaker 3: maybe they're you know, like I don't know how many
Speaker 3: potential homes there are for this kind of person. But
Speaker 3: on the other hand, like, look, Rivian has big plans.
Speaker 3: I mean, this is not a viable company at fifty
Speaker 3: or sixty thousand units a year. It's not a viable
Speaker 3: company if it's only selling vans to Amazon and not
Speaker 3: to other commercial clients. It's not a viable company if
Speaker 3: it doesn't have really it needs it needs several new models,
Speaker 3: and so you know that requires staffing up, and there's
Speaker 3: also been some interestingly, like some former Rivian people over
Speaker 3: at VW, So.
Speaker 2: I mean, who knows.
Speaker 3: Maybe it's evidence that some kind of cross pollination, maybe
Speaker 3: that even helped drive this deal, but we definitely didn't
Speaker 3: get any of that indication from just speculating on my part.
Speaker 1: Just on a personal level, I'm curious what your opinion
Speaker 1: is of RJ, especially in light of Elon. You know,
Speaker 1: you cover Elon so much, and you know RJ received basically,
Speaker 1: you know, funded by his dad and fifteen years working
Speaker 1: in total obscurity. You know, does RJ have what it takes?
Speaker 1: Does he have like him or hate him what Elon has?
Speaker 3: Yeah, I mean I I tweeted that like Rivian's like
Speaker 3: a thought experiment of a company. I used a foul term,
Speaker 3: but like what would Tesla look like if it didn't
Speaker 3: have a trollish CEO? And I think that cuts both ways.
Speaker 3: I think in certain ways it's really good, right, Like
Speaker 3: I think, and I think that you know, you could
Speaker 3: you could go back and look at what where has
Speaker 3: Tesla gone wrong? And I think clearly you all may
Speaker 3: have different views of this, but I think cyber Truck
Speaker 3: huge misstep years late. The design is is like you said,
Speaker 3: polarizing is good, but you know, maybe a little bit
Speaker 3: too polarizing, you know. And if they had just done
Speaker 3: something more conservative, easier to make, I think they would
Speaker 3: have one of the most successful pickup trucks in America
Speaker 3: right now. And I think, like maybe if Elon is
Speaker 3: like spending a little less time like fighting the woke
Speaker 3: mind virus and trying to reinvent you know, he's this
Speaker 3: famously a first principles thinker. You know, certain things the
Speaker 3: way it's done is done that way for a reason.
Speaker 3: I think Tesla spent like basically no amount of time
Speaker 3: thinking about like what do pickup truck drivers like? Why
Speaker 3: do they drive their pickup trucks?
Speaker 2: Who are they?
Speaker 3: Like they just I don't think they answered any of
Speaker 3: those questions. It's just like, let Elon wants.
Speaker 2: To make a cool pickup truck.
Speaker 3: That's the plus side. The downside is RJ is not
Speaker 3: a charismatic figure. I mean, he's liked by his employees,
Speaker 3: but like to me, like he sort of talks like
Speaker 3: a consultant to use a lot of like business y terms,
Speaker 3: and you know, he talks like a guy Frankly, who
Speaker 3: has spent a lot of time in various boardrooms, you know, pitching,
Speaker 3: and you have to be careful and and I think
Speaker 3: that create has maybe limited like it doesn't allow him
Speaker 3: to attract as much attention. He's not the he's a visionary,
Speaker 3: I think, I would argue, but not in the Elon
Speaker 3: Musk visionary sense.
Speaker 2: But you know, maybe that's okay.
Speaker 3: I mean, I think Rivin has a bet that you
Speaker 3: can have like a normal car company and be successful,
Speaker 3: and that having a normal successful car company would be
Speaker 3: really good for the world, would you know, being if
Speaker 3: we're able to come up with like the electric super
Speaker 3: or the electric Jeep, or or an electric truck that
Speaker 3: sells really well like that would that would be great?
Speaker 3: And of course Elon Musk has decided, you know, somewhat
Speaker 3: famously that he doesn't even want to think of kit
Speaker 3: Tesla as a car company, right. He wants to be
Speaker 3: a software company. So I think that's the divide, and
Speaker 3: I think it limits Rivin's upside, although it gets them
Speaker 3: out of this extremely high leverage, high risk bet that
Speaker 3: that Tesla's currently in.
Speaker 2: That was Max Chafkin talking to us about Rivian and
Speaker 2: the coolest thing, Hannah, that you're going to get to
Speaker 2: drive the new newer version of the Rivian R one s.
Speaker 2: By the way, I I don't like the pickup truck,
Speaker 2: like I feel that it's if it's not luxury at
Speaker 2: least it's like uh special vehicle, like it's a third car. Yes,
Speaker 2: and yeah, I don't need that to be a pickup,
Speaker 2: like all of my pickup be one of my first two.
Speaker 2: So I like the makes sense the suv better and
Speaker 2: I'm pretty excited to hear what you think about this
Speaker 2: new version because I think they've updated a lot, including
Speaker 2: even like the power delivery.
Speaker 1: I really think they have. Admittedly, the truck that I
Speaker 1: drove was a very early example, so yeah, I haven't
Speaker 1: driven the suv. And this is the second generations there
Speaker 1: are it's a second generation are one there, it's the
Speaker 1: dual motor. There's gonna be a tri motor coming out
Speaker 1: in the fall that I'm also gonna drive, but I'm
Speaker 1: really looking forward.
Speaker 2: And then a quad eventually a quad motor with over
Speaker 2: a thousand horse power. That's it for us this week.
Speaker 2: Be sure to email us because we thrive off your
Speaker 2: attention and what's our what's our email address hot Pursuit
Speaker 2: at bloomberg dot net. And yes, we will respond, and
Speaker 2: we also take suggestions. And that's all I got.
Speaker 1: I'm Matt Miller and I'm Hannah Elliott at this is Bloomberg.
Speaker 3: Hmmm,