RHO Level 0 Discussion

[AnthonyRI]

Ok…this is a long one, but I promise it will be worth it for L0 pre-order “victims”.

Caveat: This is solely my opinion based on observation, facts and some realistic assumptions. But, I’ve got a pretty good track record on this stuff.

Oberservation: Yesterday, I visited my local Ram dealer to see my 1st RHO in the flesh. It was an ordered L1 truck that was passed over by the original buyer as he did not care for the color (uh-huh). During my visit, at least a half dozen enthusiasts admired the truck and made positive comments. One asked if it was for sale. The answer was “We have a buyer making a deal with two individuals on stand-by if that buyer passes.” It was sold before I left.

Fact: Stellantis just had a disasterous earning call. Something like a 48% drop in profitability. Do you think they want to improve their profitability? Absolutely! Does an L1 RHO represent more revenue & profit to Stellantis? Very likely.

Fact: The vast majority of pre-orders have been L1. I would make an educated guess they have at least 2,000 L1 pre-orders waiting to be built or shipped. If an L1 buyer drops out, are they worried about selling that truck? Based on my previous observation, no.

Current discussion: Ram has told a dealer that L0 orders will be delayed, but no ETA or specific reason provided. Hmmmm…

Conclusion: Until Ram has a significant number of unsold L1 RHOs on the ground, L0 will remain an enigma. Let’s face it…if Ram was your business, would you waste time building a less profitable “L0 widget”, when you have a waiting list for your more profitable “L1 widget”?

How long will this take? 3 months, 6 months, 12 months? IDK. And, will Ram likely increase the price at some point in the future? Absolutely.

So, if you can wait an indefinite amount of time & you work too hard for your $$ to spend another $10K for stuff you don’t care about, wait it out & hold on to your pre-order pricing. Just keep in mind, if they don’t build any until 2026 model year (I sure hope that is not the case), you will likely be subject to 2026 L0 pricing.

Lets assume 3K RHO orders in the system currently (it's likely less, as it was under 2700 at the beginning of the month).
Mark Dodge has about 12% L0, but lets assume that nationally maybe it's 15%.
That makes 450 vehicles at stake IF they were all destined to be built rather quickly aside form their inherent flaw.

Assuming the limiting factor is the raw # of how many RHO's they can invoice between now and year-end, then the delta in revenue on those 450 trucks is $4.5M (saying that they are choosing to build 450 L1s instead of 450 L0s, at $10K difference per truck)

Now, with any manufactured good, we know that $4.5M in sales isn't the same as $4.5M in profit.
It's less than 10% profit, so lets say $500K profit at stake?
Doesn't even hit their radar.


So I don't think it's this very small % of money-grab that would make them hold back L0s.
Still they won't tell me WHAT it is.

 

[NEBOYSA]

Lets assume 3K RHO orders in the system currently (it's likely less, as it was under 2700 at the beginning of the month).
Mark Dodge has about 12% L0, but lets assume that nationally maybe it's 15%.
That makes 450 vehicles at stake IF they were all destined to be built rather quickly aside form their inherent flaw.

Assuming the limiting factor is the raw # of how many RHO's they can invoice between now and year-end, then the delta in revenue on those 450 trucks is $4.5M (saying that they are choosing to build 450 L1s instead of 450 L0s, at $10K difference per truck)

Now, with any manufactured good, we know that $4.5M in sales isn't the same as $4.5M in profit.
It's less than 10% profit, so lets say $500K profit at stake?
Doesn't even hit their radar.


So I don't think it's this very small % of money-grab that would make them hold back L0s.
Still they won't tell me WHAT it is.

Exactly what I was thinking.

My brother who runs one of the dealers in Big city is more worried why they have less than 10 work trucks for end of year than our rho orders