Rivian Says Canceling Its Cheapest EVs Will Allow It To Produce More Vehicles Faster

David Shultz

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.

Rivian Says Canceling Its Cheapest EVs Will Allow It To Produce More Vehicles Faster
Photo Courtesy of Rivian

In a letter yesterday to customers who've preordered the vehicles, Irvine-based EV startup Rivian gave notice that it will no longer offer the most affordable versions of its electric vehicles.

The “Explore Package” was to be the entry-level version (or “trim” as it’s called) of Rivian's R1T electric truck. Though the base model had yet to hit the market, it was slated to cost $67,500. Now, buyers—even those who preordered—will have to shell out at least $73,000 for the next trim up, the “Adventure Package.”


The upscaled version of the truck has better speakers, better seats, some interior options and off-road upgrades like tow hooks and floor mats. The battery remains unchanged.

Rivian says it made the decision to axe the entry level due to limited interest in the offering and a desire to streamline production. The company says the move will allow it to build more vehicles more quickly. Rivian is less vo al about this move will allow it to charge an extra $6.5k for each Explorer trim car it converts to Adventure. While some of that cost is assuredly due to the upgraded components, it’s no secret car manufacturers typically make the best margins on their high-end offerings.

There are two ways to view this move:

1. It’s undoubtedly a smart business move from Rivian. Streamlining production is essential if the fledgling company is going to hit the 25,000 vehicle production target that it recently reaffirmed in its Q2 earnings call. It’s probably good news for investors as well. The company may lose a few preorders from customers who were set on the $67.5k price point, but Rivian is already building as many cars as it possibly can every day, so anything that increases vehicle price increases how much revenue Rivian makes. The company has to survive until its new plant opens and production on its more affordable R2 model can get underway. Any move that ensures survival in the short term is a good long-term play.

2. The decision is a big middle finger to customers and shows Rivian hasn’t learned its lesson from last spring, when it incited buyer's rage by reneging on the cost of its trucks. It also adds to the growing list of ridiculously expensive EVs that are aimed at the very wealthy, leaving middle class would-be EV buyers up a creek. The new price hike also puts the majority of Rivian’s models outside the $80,000 price cap for the Inflation Reduction Act rebate. For all the company’s commitment to sustainability and vegan leather, wouldn’t it just be better for the environment to get cheaper cars into the hands of everyday people at a lower price point?

The truth, as usual, is probably somewhere in the middle. You can’t build a fleet of Earth-saving electric vehicles if you can’t stay in business. Then again, if your Earth-saving vehicle has to cost $73,000, you’re not saving anything except for the conscience of a few rich people.

Fingers crossed for that R2 though.

Subscribe to our newsletter to catch every headline.

How Women’s Purchasing Power Is Creating a New Wave of Economic Opportunities In Sports

Samson Amore

Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.

How Women’s Purchasing Power Is Creating a New Wave of Economic Opportunities In Sports
Samson Amore

According to a Forbes report last April, both the viewership and dollars behind women’s sports at a collegiate and professional level are growing.

Read moreShow less
https://twitter.com/samsonamore
samsonamore@dot.la
LA Tech Week Day 5: Social Highlights
Evan Xie

L.A. Tech Week has brought venture capitalists, founders and entrepreneurs from around the world to the California coast. With so many tech nerds in one place, it's easy to laugh, joke and reminisce about the future of tech in SoCal.

Here's what people are saying about the fifth day of L.A. Tech Week on social:

Read moreShow less

LA Tech Week: How These Six Greentech Startups Are Tackling Major Climate Issues

Samson Amore

Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.

LA Tech Week: How These Six Greentech Startups Are Tackling Major Climate Issues
Samson Amore

At Lowercarbon Capital’s LA Tech Week event Thursday, the synergy between the region’s aerospace industry and greentech startups was clear.

The event sponsored by Lowercarbon, Climate Draft (and the defunct Silicon Valley Bank’s Climate Technology & Sustainability team) brought together a handful of local startups in Hawthorne not far from LAX, and many of the companies shared DNA with arguably the region’s most famous tech resident: SpaceX.

Read moreShow less
https://twitter.com/samsonamore
samsonamore@dot.la
RELATEDEDITOR'S PICKS
Trending