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Elon Musk Defends a Threatening Tesla Rival

The billionaire is known to attack his critics. It is rare to see defend his direct rivals.
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Elon Musk is not known for standing up for his rivals. It's quite the opposite because he doesn't like being upstaged. 

The charismatic CEO of Tesla  (TSLA) - Get Tesla Inc. Report and SpaceX has just played, for a few tweets, the lawyer of one of the most serious rivals of Tesla, the manufacturer of high-end electric vehicles. 

This defense is all the more surprising as it comes when this adversary has one knee on the ground, the ideal moment to make them bend the other knee in this merciless race for electric vehicles between car manufacturers.

After Rivian  (RIVN) - Get Rivian Automotive Inc. Report, the young electric vehicle maker, announced that they would only produce 25,000 cars in 2022 due to supply chain issues, debate erupted on social media over its future. 

And as often, commentators immediately released figures - unfavorable to Rivian - to compare Rivian to Tesla. The idea of ​​these comparisons was obviously to say that Rivian was not on the level of Tesla. That's when Musk stepped in.

"Prototypes are easy, production is hard," recently wrote Musk, reacting to a tweet of a fan accompanied by figures showing that even comparing Tesla after its IPO and Rivian at the same stage, the billionaire group is far ahead of its competitor.

"Making an electric car was not the hard part of Tesla – dozens of companies have done that," Musk continued.

He then continued his demonstration in these terms.

"But reaching volume production with sustained positive cash flow was last achieved by an American car company, Chrysler, ~100 years ago!" Musk defended. 

"Ford & Tesla are the only American car companies to avoid bankruptcy. Even GM & Chrysler went bankrupt in 2009."

In other words, wanting to bury Rivian because the electric vehicle maker is struggling to handle increased production rates isn't fair. Rivian was founded in 2009 and went public in 2021. Its elder Tesla was created in 2003 and went public in 2011.

Rivian R1S Lead

Rivian recently admitted to having major problems mass-producing cars to meet demand.

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"The biggest constraints we now face really lie with the supply chain, and it's really a small number of parts for which the supplier isn't ramping at the same rate as our production lines are ramping up," CEO RJ Scaringe told analysts during the fourth-quarter earnings' call.

"Our primary focus will be to ramp our normal facility and the production of our R1 and RCV platform. While we work diligently to alleviate any supply-chain challenges, we believe that through 2022, the supply chain will be the fundamental limiting factor to our total output for the year," added Chief Financial Officer Claire McDonough.

Rivian, which produces three vehicles -- the R1T electric pickup truck, the R1S electric SUV, and the the RCV electric commercial van -- in Normal, will soon start building its second production site, east of Atlanta. 

The difficulties that Rivian and Lucid Group  (LCID) - Get Lucid Group Inc. Report, another Tesla rival, are going through, seem to remind Musk of similar painful memories with Tesla.

Indeed, when a commentator pointed out to him that Tesla was on the verge of bankruptcy, Musk didn't back down.

"Tesla was literally on the breach of bankruptcy in 2018 and it’s insane you got through it," said the user.

Musk replied:

"True. That was mega pain," Musk admitted.

This isn't the first time Musk has said Tesla nearly filed for bankruptcy in 2018. In November 2020, the world's richest man tweeted that his company had been about a month away from bankruptcy in recent years when it was still figuring out how to mass produce the Model 3 electric sedan.

"Closest we got was about a month. The Model 3 ramp was extreme stress & pain for a long time — from mid 2017 to mid 2019. Production & logistics hell," Musk said on Nov. 3, 2020. 

Tesla had indeed experienced great difficulty in increasing the production rates of the Model 3, its entry-level vehicle intended to appeal to consumers with average incomes.

This difficult period in Tesla's history is symbolized by an interview with Musk on the Joe Rogan podcast in September 2018. During this interview, Musk and his host smoked weed.