Rivian Backtracks on Price Hikes, Reinstates Original Prices for Pre-Order Holders

Molly Wright

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.

Rivian Backtracks on Price Hikes, Reinstates Original Prices for Pre-Order Holders
Rivian Files to Go Public, As Its Electric Trucks Prepare to Ship

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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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In wholly unrelated news, Elon Musk has announced plans to relocate the headquarters of X (formerly Twitter) and SpaceX from California to Texas. SpaceX will move from Hawthorne to Starbase, while X will shift from San Francisco to Austin. Musk cited concerns about aggressive drug users near X's current headquarters and a new California law regarding gender identity notification in schools as reasons for the move. This decision follows Musk's previous relocation of Tesla's headquarters to Texas in 2021.

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Top LA Accelerators that Entrepreneurs Should Know About

Los Angeles, has a thriving startup ecosystem with numerous accelerators, incubators, and programs designed to support and nurture new businesses. These programs provide a range of services, including funding, mentorship, workspace, networking opportunities, and strategic guidance to help entrepreneurs develop their ideas and scale their companies.


Techstars Los Angeles

Techstars is a global outfit with a chapter in Los Angeles that opened in 2017. It prioritizes local companies but will fund some firms based outside of LA.

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Idealab

Idealab is a renowned startup studio and incubator based in Pasadena, California. Founded in 1996 by entrepreneur Bill Gross, Idealab has a long history of nurturing innovative technology companies, with over 150 startups launched and 45 successful IPOs and acquisitions, including notable successes like Coinbase and Tenor.

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Techstars Space Accelerator

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Location: Los Angeles

Type of Funding: Growth stage

Focus: Aerospace

Notable Past Companies: Pixxel, Morpheus Space



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🚁 One Step Closer to Air Taxis in LA
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Joby Aviation, a pioneering electric air taxi company, has achieved a significant milestone by successfully flying a hydrogen-electric aircraft demonstrator for 523 miles with only water as a byproduct. This groundbreaking flight showcases the potential for emissions-free regional travel using vertical take-off and landing (eVTOL) aircraft, eliminating the need for traditional runways. The company's innovative approach combines its existing battery-electric air taxi technology with hydrogen fuel cells, paving the way for longer-range, environmentally friendly air travel.

For LA residents, this development holds exciting implications for future transportation options. Joby's technology could potentially enable direct flights from LA to destinations like San Francisco or San Diego without the need to visit conventional airports, offering a cleaner and more convenient alternative to current travel methods. The company's progress in both battery-electric and hydrogen-electric aircraft positions it at the forefront of next-generation aviation, promising to revolutionize urban and regional mobility.

Notably, Joby Aviation has already made strides in Southern California by securing an agreement with John Wayne Airport earlier this year to install the region's first electric air taxi charger. This strategic move sets the stage for LA to be among the initial markets where Joby will launch its electric air taxi service. With plans to commence commercial operations as early as 2025 using its battery-electric air taxi, LA residents may soon have access to a fast, quiet, and environmentally friendly mode of transportation that could significantly reduce travel times and traffic congestion in the region. In the not too distant future, LA might find itself in an identity crisis without traffic and excess smog 🤞🤞.


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