"We generated negative gross profit of $(1,000) million for the fourth quarter 2022. For fiscal year 2022, we generated negative gross profit of $(3,123) million. Gross profit for
the fourth quarter 2022 was impacted by a lower of cost or net realizable value (“LCNRV”) of inventory charge and losses on firm purchase commitments of $920 million as of December 31, 2022 compared to $95 million as of December 31, 2021. We expect to continue to incur these charges throughout 2023 but anticipate the total charge will decline as we drive down cost of goods sold per vehicle by lowering material, production, logistics, and other costs. We forecast reaching positive gross profit in 2024 and therefore expect that by the end of 2024, we will no longer have material LCNRV inventory charges and losses on firm purchase commitments associated with our Normal facility."
You are incorrect. 'Loss' is a perfectly acceptable GAAP term for negative profits on the P&L, it's just that 'Gross Loss' is so rare, nobody really uses it.
You can even look at the 10-k and see they say 'Net Loss' instead of 'Net Income.'
>"negative gross profit" ... that is corpspeak for "loss" right?
Negative gross profit means they are selling the cars for less than it costs to make them, which is like 'mega-loss.'
It's one thing to make $5k per truck, but then spend a lot on advertising to get the word out (eventually the word is out and you can slow down advertising/spread it across more sales).
It's another thing to lose $5k per truck and still have to spend money on advertising it.
EDIT: To be fair, this is because Rivian built big/expensive factories and still only makes a small amount of cars in those factories. A big question will be their ability to actually use those factories to their full potential.
Maybe they’re trying to trick the automated trading algorithms that buy and sell shares based on sentiment analysis. Negative gross profit sounds vaguely like a good thing at a glance
