Someone Has It Out For Rivian Founder RJ Scaringe

Pressure always reveals the weaknesses in a system, a fact that’s becoming increasingly clear to automakers. It’s tough out there right now, with a lot of competition, fragile geopolitical alliances, and depressed markets. There’s been more automotive C-Suite churn in the last twelve months than at any time since the GFC, and someone seems to have it out for Rivian founder and CEO RJ Scaringe.

Today’s Morning Dump will start not in California, where the company is based, but in Germany, where a lot of the money is coming from lately. Specifically, a German business magazine has some juicy quotes from an “associate” implying a lot of dysfunction on Scaringe’s part and general displeasure with his leadership.

If your guess is that the call is coming from inside the House of Wolfsburg, I wouldn’t blame you. There’s immense pressure on Volkswagen, too. The automaker has to find a way forward, but the current CEO doesn’t think selling luxury EVs to China is going to be how it’ll do it. Could autonomous vans put Volkswagen back on the path to success?

Nissan catapulted its CEO out of the company this year, and now the new guy has to admit there’s going to be billions of dollars in losses this year. In some ways, that may take the pressure off. Set the bar so low a snail could clear it, as I always say.

One of the reasons given for the trade war is that China doesn’t import enough from the U.S., relative to what it exports. Chinese automakers are responding by importing the West’s most renewable resource: Influencers.

Scaringe Is ‘Not Suited To Be A CEO’: Report

I made the call last year to get a subscription to Manager Magazin, and so far I’ve had no regrets. As a sort of German equivalent to Forbes, the business publication is a great source of executive backstabbing. Messy European C-suiters are basically my version of Real Housewives, so let’s grab some popcorn and see what they’re up to today.

Here’s the headline (all Google translated): “Volkswagen partners in crisis: How Rivian founder RJ Scaringe is losing influence in the company”

Some context: last year, Volkswagen CEO Oliver Blume took one look at its troubled software unit and decided, rather than try to salvage that investment, it was better to pour money into Scaringe’s Rivian electric truckmaker. Then, earlier this year, Volkswagen gave even more money to Rivian as part of a deeper partnership. At the time, I felt that VW was going to exercise more control over this company. This is somewhat counterproductive because VW’s own investment was a tacit admission that its processes failed.

How’s this partnership working out?

“RJ is a great tinkerer, but not suited to be a CEO,” one of his associates told manager magazin, adding that Scaringe is “resistant to advice.” Some of his investors complain that the Rivian CEO is juggling too many hoops. He recently spun off Also, a company for electrified micro-vehicles. Joint venture partner Volkswagen is also said to be less than thrilled about how much money Rivian continues to burn: In 2024, it posted a loss of $4.7 billion.

Major shareholder Amazon – the tech giant holds 14 percent of Rivian’s shares – has already signaled that it no longer wants to participate in new financing rounds. Should the startup need fresh capital, the Wolfsburg-based company would likely be forced to inject more capital if it doesn’t want to dilute or write off its existing billion-dollar investment. Volkswagen is following Scaringe’s course with corresponding alarm.

Oh boy. To be fair to Scaringe, these are the complaints pretty much everyone can make of founder/CEOs.

The placement of the gossip is almost as important as the content. This wasn’t in TechCrunch or Sherwood, which is where you’d think someone from Amazon would air its dirty laundry. The large institutional investors like Vanguard and BlackRock? That’s more of a Wall Street Journal kind of crowd. Who would say this to Manager Magazin? Only the reporter and the source know for sure, but it’s at least where you’d go to make it sound like the pressure is coming from someone Volkswagen-related.

In particular, that little note that VW is in the awkward position of having to write off the investment it was making in Rivian, which itself led to the writing off of the Cariad software unit investment. Ok, one more bit from the article:

RJ Scaringe needs a quick turnaround. It would help his company, his prospects as CEO, and also his finances. Rivian’s IPO in 2021 turned the founder into a billionaire overnight; the market value briefly shot up to $150 billion – Rivian was worth much more than Volkswagen at the time. His remaining 0.3 percent stake is now worth less than €35 million. In terms of wealth, RJ Scaringe is truly the antithesis of Elon.

Rivian is losing money, its sales aren’t great, and it seems far away from the production of its smaller models. There’s now a ton of competition, both from electric automakers and hybrids. We don’t know for sure who is sending Scaringe a warning, but the message is clear: fix it or else.

VW Might Give Up On EVs In China, Do Uber Vans Elsewhere

The new Porsche Macan EV is a great electric crossover, just like the Taycan is a great electric car. That’s apparently not enough in China, where the brand has faced serious difficulty competing with companies like Xiaomi and Yangwang.  The former sold more than twice as many SU7 sedans in China as Porsche sold anything in the country.

Current VW and Porsche CEO Oliver Blume was at Auto Shanghai and indicated that maybe trying to compete with German EVs in a market overwhelmed with Chinese competition isn’t a great long-term strategy. From Reuters:

Blume said the company might abandon the EV segment entirely in China, where more than half of new cars sold are now EVs and hybrids. Porsche sells two EVs here, the Taycan and Macan. It does not report specific model sales by country, but Blume said Porsche’s EV sales in China were “relatively low.”

“We will see in the next two to three years whether Porsche exists as an electric brand here,” he said.

The core attributes that have historically made a Porsche a Porsche — the throaty roar of a 911’s flat-six-cylinder engine, for instance — do not have the same appeal in China as in other Porsche markets.

“The concept of Porsche as a golden brand means nothing to younger generations in China,” said Bo Yu, China country manager at research firm JATO Dynamics.

That’s rough. It’s not all bad news, though. Uber and Volkswagen are pairing up in the United States to test a bunch of autonomous ID.Buzz vans. The ID.Buzz is a perfect rideshare vehicle, I think. Here’s how Uber describes its plans:

Testing is expected to begin later this year, with the first commercial launch expected in Los Angeles in 2026. During the initial testing and launch phases, ID. Buzz AD vehicles will have human operators onboard to help refine the technology and ensure safety. Each step will proceed only after any necessary regulatory approvals have been received.

MOIA, a Volkswagen AG autonomous mobility brand, will provide its integrated solution for autonomous driving which includes the ID. Buzz AD and software-based system for the deployment on the Uber platform.

“Volkswagen is not just a car manufacturer—we are shaping the future of mobility, and our collaboration with Uber accelerates that vision,” said Christian Senger, CEO of Volkswagen Autonomous Mobility. “What really sets us apart is our ability to combine the best of both worlds—high-volume manufacturing expertise with cutting-edge technology and a deep understanding of urban mobility needs.”

Autonomous cabs like these will become a larger part of the ecosystem, no doubt. I just wonder how many overlapping brands can be successful at once. This is starting to become like EVs a few years ago, where everyone assumed CAGR of a trillion percent and then were shocked that their $65,000 electric crossovers were competing over a slowly growing market.

Nissan Expects To Lose $5 Billion This Fiscal Year

Nissan has a new CEO, Ivan Espinosa, and he seems like a cool enough dude. One of his first jobs as the gearhead in charge is to let everyone know what to expect. Specifically, people should expect Nissan to lose more money than initially guessed. From the company’s statement:

Compared with the outlook issued at the time of Nissan’s third quarter results in February, the forecast full-year sales volume has been lowered to 3.35 million units. Full-year net revenue is now expected to reach 12.6 trillion yen, with operating profit of 85 billion yen. This is primarily due to changes in the competitive environment and deterioration in sales performance.

As part of the revised outlook, Nissan expects to report a net loss of 700-750 billion yen for fiscal year 2024. The revision is due to costs related to its ongoing turnaround plan, and other factors.

The management team has conducted a thorough review of production assets, leading to impairments exceeding 500 billion yen across North America, Latin America, Europe, and Japan. Additionally, restructuring costs are expected to exceed 60 billion yen as part of ongoing turnaround measures.

What does Espinosa have to say about this?

“We are taking the prudent step to revise our full-year outlook, reflecting a thorough review of our performance and the carrying value of production assets,” Espinosa said in a statement. “Despite these challenges, we have significant financial resources, a strong product pipeline and the determination to turn around Nissan in the coming period.”

I hope those crazy kids figure it out.

Chinese Automakers Invite Hundreds Of Influencers

I was a little surprised this week to discover that numerous colleagues I’d just seen in New York for the auto show were suddenly on planes to Shanghai for the big show there. I shouldn’t have been surprised, as, according to this Bloomberg article, Chinese automakers invited a ton of people.

Although official figures are difficult to come by, corporate events held in the lead up to China’s biggest car show hosted hundreds of reporters packed into luxurious hotel briefing rooms to hear about the latest models built by BYD Co., Zeekr and other Chinese electric vehicle manufacturers.

It’s a clear change of attitude in a country known for tight controls over journalist visas.

[…]

China’s top-selling car brand BYD hosted some 150 journalists and influencers from Latin America who came from as far as El Salvador, Paraguay, Ecuador, Chile and Peru. The lively pack were treated to the luxury hotels in Shanghai that line the Huangpu river overlooking the Bund, including one with rooms going for at least $375 a night.

So, let’s see here, our country is jailing and scaring tourists, and China is “rolling out the red carpet.” I’m sure this will all end well.

What I’m Listening To While Writing TMD

Oh man, the sisters of HAIM have a new song out, and it stars a classic Land Cruiser. Please enjoy “Relationships.”

The Big Question

Let’s “Clue” this noise: Who do you think is trying to put a shoulder into Scaringe?

Photo: Rivian, depositphotos.com