Rivian Raises Electric Vehicle Prices, Citing Inflation and Supply Chain Issues
David Shultz reports on clean technology and electric vehicles, among other industries, for dot.LA. His writing has appeared in The Atlantic, Outside, Nautilus and many other publications.
Sign up for dot.LA's daily newsletter for the latest news on Southern California's tech, startup and venture capital scene.
Inflation is the economic buzzword of the moment, and it appears that rising costs are impacting electric vehicle manufacturer Rivian as well.
The Irvine-based company announced yesterday that it intends to raise the price of its electric vehicles to account for inflation and supply chain woes. Rivian’s R1T pickup truck will see a 17% increase to its base price, to $79,500, while its R1S SUV will be 20% more expensive, or $84,500.
“Like most manufacturers, Rivian is being confronted with inflationary pressure, increasing component costs, and unprecedented supply chain shortages and delays for parts (including semiconductor chips),” Rivian chief growth officer Jiten Behl said in a statement.
The price hikes will apply to most Rivian pre-order holders with a few exceptions, such as those who are finalizing their transactions or are close to receiving delivery of their vehicles. The company did not provide specific numbers around how many customers will be impacted.
The move has been met with derision on social media, drawing ire from pre-order holders as well as snarky analysis from Tesla CEO Elon Musk. Investors haven’t taken kindly to the news amid indications that many with pre-orders could cancel their reservations; Rivian’s stock has fallen more than 20% since Monday’s close, to $53.56 per share.
While nobody wants to hear that the car they pre-ordered is going to cost more than advertised, inflation and supply chain issues are real problems without easy solutions for automakers.
The chip shortage, in particular, has pushed manufacturing costs higher and hurt carmakers’ ability to meet demand. Contemporary cars can contain tens of thousands of semiconductor chips, and even the most vertically-integrated car company can’t produce their own chips, Rivian included.
Rivian also noted that its previous price points were set in 2018, when the average MSRP for a new car was around $38,000 at the start of the year. Since then, that figure has swelled to almost $46,000, according to Edmunds data—an increase of more than 20%.- Rivian, Fisker Get Pummeled Amid Stock Market Selloff - dot.LA ›
- For Buyers, EV Incentives Are a Godsend — and a Head Scratcher ›
- Five Things You Should Know About Rivian - dot.LA ›
- Rivian Backtracks on Price Hikes, Reinstates Original Prices - dot.LA ›
- Rivian's Electric Truck Powers A Vasectomy - dot.LA ›
David Shultz reports on clean technology and electric vehicles, among other industries, for dot.LA. His writing has appeared in The Atlantic, Outside, Nautilus and many other publications.
Image Source: Tinder
Image Source: Apple