Rivian Backtracks on Price Hikes, Reinstates Original Prices for Pre-Order Holders
Molly Wright is an intern for dot.LA. She previously edited the London School of Economics' student newspaper in the United Kingdom, interned for The Hollywood Reporter and was the blogging editor for UCLA's Daily Bruin.
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Rivian has backtracked on steep price hikes to its electric pickup trucks and SUVs, with the Irvine-based company’s CEO apologizing to customers and reinstating the vehicles’ original prices for those who had pre-ordered cars before this week.
On Tuesday, Rivian announced that it would increase the base price of its R1T pickup truck by 17%, to $79,500, while its R1S SUV’s base price would jump 20%, to $84,500. Though the automaker explained that the move was tied to inflation, supply chain issues and the rising cost of materials, its decision drew the ire of pre-order holders—many of whom said they would cancel their reservations—and saw Rivian’s stock drop precipitously.
In an open letter on Thursday, Rivian CEO RJ Scaringe apologized for “break[ing] the trust that we have worked to build” with customers and confirmed that the company would honor its vehicles’ original prices for pre-orders placed before March 1. Scaringe added that any customer who canceled their order on or after the price hike announcement would be able to reinstate the order at its original price.
The CEO reiterated that the price increases were due to production costs that “have risen considerably” in recent times. “Everything from semiconductors to sheet metal to seats has become more expensive, and with this we have seen average new vehicle pricing across the U.S. rise more than 30% since 2018,” Scaringe said.
But he acknowledged that Rivian had botched its rollout of the move to customers. “We didn’t give you enough insight into what was driving these decisions,” Scaringe admitted. “In speaking with many of you over the last two days, I fully realize and acknowledge how upset many of you felt. I have made a lot of mistakes since starting Rivian more than 12 years ago, but this one has been the most painful. I am truly sorry and committed to rebuilding your trust.”
After news of the price hike broke on Tuesday, a poll on the Rivian Owners Forum online community indicated that approximately 63% of respondents planned to cancel their R1T and R1S orders. The move also drew snarky analysis from Tesla CEO Elon Musk, and has triggered a 25% drop in Rivian’s stock price since the close of trading Monday.
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Molly Wright is an intern for dot.LA. She previously edited the London School of Economics' student newspaper in the United Kingdom, interned for The Hollywood Reporter and was the blogging editor for UCLA's Daily Bruin.
