The Exchanges

Q up. Since the election Rivian stock is kind of flat. Um, but just talk about like what Elon might be doing there. I wouldn't, you know, ask you to speak for him, but let me just ask you if you were the first buddy, what would be some EV friendly policy that you'd want to put forth? Anything about tariffs, anything about electric vehicle credits? Like what would you want?

A I think I'd answer, I'd answer it from the perspective of what's best for the world. And what I truly and deeply believe is best for the world is we need to have multiple, uh, choices as a consumer. So that means lots of different companies building highly compelling products. Uh, those products need to give customers choice, which is ultimately what's going to drive us from, you know, sub-ten percent EV adoption to a hundred percent EV adoption. And so the mechanisms, mechanisms to help drive that are, are Both the carrots and the sticks. The carrots, uh, you know, typically are consumer facing and we had. I've had a 7500 dollar tax credit that's consumer facing. The sticks or, or sort of forcing mechanisms are the, the fines that manufacturers have to pay if they're not building vehicles that are, you know, hit certain greenhouse gas emission standards or, uh, hit certain levels of electrification zero emission vehicle credits. And the credits are helpful in that they don't cost the government anything. Uh, so we actually sell our excess credits to other manufacturers. So it becomes a cost to manufacturers and a source of income for, for those that are building more efficient vehicles. And you have Tesla of course is the biggest, um, Player in the credit space just by virtue of them being the largest builder of electric vehicles. Yeah.

AI assessment note: “The mechanisms to help drive that are, are Both the carrots and the sticks.”

Q of EVs and all different types of models that are available to lots of different people. And that's the way that this is going to get off the ground. And of course the VW group has Audi and Porsche and VW. And is this sort of the way To get those different models to like electrify these models and then sort of make it available to lots of different people?

A Yeah, I mean, I, I couldn't be more excited about the Volkswagen relationship and partnership. We started these discussions more than a year and a half ago, and it, you know, a deal of this size and its complexity certainly takes time. But, you know, Volkswagen as a group is the second largest vehicle manufacturer in the world, um, very close to the largest and in terms of size, in terms of number of vehicles. And, you know, the reason I started Rivian was to have as much impact as possible and to help drive and accelerate the transition to renewable energy and sustainable transportation. So the opportunity to take our technology and help Volkswagen Group Create products that are highly compelling and that'll pull more customers in across a variety of different form factors, price points, brands, markets, you know, across the planet, uh, was really, really enticing and exciting. And of course the technology we developed is, is really strong. Um, and it's, you know, we, I think there's really two companies in the world that have this level of vertical integration and an architecture that's used. Hardware consolidation to massively simplify, uh, the topology of computers, which is us and Tesla, of course. And so, you know, Volkswagen has really leaned in with us. And so the, the 5.8 billion dollar deal reflects just the scale of this. I think often as we've talked about this, it'…

AI assessment note: “help Volkswagen Group Create products that are highly compelling and that'll pull more customers in”

Q or one of the things that people talk about when they talk about EVs is that, I think it's lithium within the batteries, that maybe one day it's gonna run out, or it's really tough to get, or sourcing it, uh, you know, ends up, if you're gonna buy lithium, it's gonna be, you might end up running into, like, some human rights issues. What do you think about that?

A Well, first, a significant misconception and, um, piece of misinformation in the world is that, Uh, batteries like burn through and use up the materials that are in them. So like lithium gets consumed. Um, that's not the case. So the, there's an opportunity for once you get batteries in the system, you're going to continually reuse the lithium. So it's really a closed loop system. And the value of the batteries is too high to, uh, even imagine a world in which, you know, they're just like thrown away. So there's no world in which you're like, have landfills full of lithium ion batteries. It'd be like throwing away. Um, boxes of gold necklaces. Um, so that's the first point, is it, it, it will absolutely end up with a closed loop, really high rate of recycling. And, and an example of this, which is worth calling out, is a lead acid battery, where lead is not very valuable, but it's more valuable than, let's say, plastic, but the recycling rate on lead acid battery is around 99%. Um, so I would, I would say unequivocally, the recycling rate on lithium-ion batteries will be You're very near a hundred percent, 99.9%, maybe 99.99%. So with that said, in the short term we have to extract enough lithium from the earth to support this, what eventually becomes closed loop cycle for batteries. And, um, there's a lot of places that have lithium. Most of them aren't in the United States, s…

AI assessment note: “with lithium, there's, there's lots of places to get it where there's not questions”

Q So a lot is demanding, uh, more juice from the grid right now. You have UVs that are rising, you have AI, which like seems like it needs another nuclear plant every other day. And you have Bitcoin. I don't know how big that is, but I imagine it's big. Is our grid in good enough shape to sustain all these at once?

A Absolutely not. No, no. It's, um, I mean, that's, that's the, that's the thing that makes this such a unique moment in time. It's, uh, we have one and a half billion cars on the planet that need to be replaced. We have thousands of coal power plants that have to be turned off. We have thousands of natural gas power plants that have to be turned off, replaced. We have a grid that's Uh, archaic and doesn't have any of the supply demand mapping that we should be thinking about, you know, uh, doesn't have, you know, effective ways from a policy point of view, even managing things like net metering, um, We have buildings that are leaking air and aren't, aren't sealed properly for thermal. I mean, there's just like opportunity after opportunity after opportunity. And so you could look at it and say, oh my goodness, this is terrible. What are we going to do? Or you could look at it in our view and it's like, holy cow, there are so many business opportunities to go build this future world. And you said AI and I'm glad you brought it up. I mean, imagine the scale of this transition. This is not a once in a generation transition. This is a once in a, There's only one time that the world went through the fossil fuel revolution. So like, like the 18, late 1800 is only going to happen once. And the turnoff of fossil fuels is only going to happen once. And the turn on of renewable energy and…

AI assessment note: “Absolutely not. No, no. It's, um, I mean, that's, that's the, that's the thing”

Q Okay. So you've written them. What do you think?

A Well, I think first and foremost, it's, it's important that they exist. It's important that we have choices across lots of price points. Um, and to achieve that, you know, you need a few things. You need really heavy cost focus at the, at the design level. So the vehicles are engineered for cost. Um, You need to have supply chains that are really robust and efficient. Um, you, of course, benefit in the case of China from a much lower cost labor rate than what we have in, in the Western world, certainly in the United States. Uh, and then in the case of China, you do have just, you have this in the US, but to a more, uh, you know, you know, to a more elevated level. You have incentives that are happening at the, at, you know, the federal or the local government level. And so the combination of all those things have allowed for some really attractively priced EVs to be made and produced and sold in China. Um, and, you know, I think this is great. I think long, long term, some of the incentive structures that we see, just like we've talked about at the start of this call, you know, are, are not going to be permanent. But the efficiencies of design and some of the efficiencies that an EV affords in terms of architectural layout will start to play out as you get to lower cost batteries, you know, other than the battery and electric vehicle is, is actually a lot cheaper to build. It's…

AI assessment note: “I think first and foremost, it's, it's important that they exist.”

Q As you're talking, it seems to me like it would make a lot of sense to just merge these two companies. Why is it important to you to stay independent?

A Yeah, well, again, to be clear, this isn't, um, we're not like the things that customers will experience, they'll experience like better over the year updates, but they're not going to, um, If you're in an Audi, you're not going to see Rivian parts, and if you're in a, you know, if you're in a Rivian, you're not going to see Audi parts, so, um, you know, it's really at the software level, so I think the way I look at it is we're building a company that designs and develops vehicles, but we also have a huge technology focus, and so we also embedded within that as a technology company, and clearly, as demonstrated by this deal, we're selling technology, so we, we have a, But clear business line that's in addition to just the vehicles themselves.

AI assessment note: “we're selling technology, so we, we have a, But clear business line”