Rivian walks back price increase for reservation holders, CEO apologizes03/03/2022
Rivian on Thursday made an about-face to not raise prices on anyone who had preordered an R1T electric truck or R1S SUV but not yet finalized their transaction. On Tuesday, March 1, Rivian increased prices $12,000 on both vehicles it manufactures. Preorder holders who canceled their order due to the abrupt $12,000 price increase can reinstate their orders for the original price, CEO RJ Scaringe confirmed in a press release.
“As we worked to update pricing to reflect…cost increases, we wrongly decided to make these changes apply to all future deliveries, including pre-existing configured preorders,” Scaringe said on behalf of the electric automaker startup. “We failed to appreciate how you viewed your configuration as price locked.”
The outburst on Rivian forums as well as on social media, in addition to the canceled preorders, forced the American automaker to reexamine its policy and provoked Scaringe to issue an apology.
“In speaking with many of you over the last two days, I fully realize and acknowledge how upset many of you felt,” the 38-year-old founder of Rivian said. “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.”
Preorder holders as of March 1 maintain their original configured price. Orders canceled on or after March 1 can be reinstated for the original price and delivery timing.
The price increases, as well as the new base model, go into effect for orders placed since March 1.
The price of the R1T pickup, which just went on sale late last year, increases from $68,575 to $80,575 (17.5%), and the R1S electric SUV, which hasn’t yet been delivered to purchasers, increases from $73,575 to $85,575 (16.3%). The base prices for the vehicles include a $1,500 destination charge (it was $1,075 prior to the price change).
Higher component costs, inflationary pressure, and continued supply chain issues were to blame for the price increase, according to a statement from Rivian, a startup that went public in November 2021.
“These price increases—the result of inflationary pressure on the cost of supplier components and raw materials across the world—will allow us to maintain product excellence as we continue investing in electrification for our shared future,” Team Rivian announced to preorder holders of the R1S, according to Rivianownersforum.com. “We remain committed to offering compelling products and helping drive competition, inspiring as many drivers as possible to switch to electric vehicles.”
Rivian promised a new entry-level variant by 2024 with a dual-motor all-wheel-drive layout with a smaller Standard battery pack as an alternative to the current base models with their more expensive quad-motor AWD systems and Large pack. The Large pack has a range of 314 or 316 miles for the pickup and SUV, respectively. The dual-motor Small pack will have an estimated range estimated of 260 miles, according to Rivian.
On the Rivian R1S configurator, the dual-motor setup costs $6,000 less, and the Standard pack cuts the price by another $6,000. That adds up to $12,000; in other words, Rivian has promised a new base model with the same base price as the old base model that had two extra motors and a larger battery pack. The new base model will cost $73,575 for now.
Prices for new cars have increased across the board to varying degrees. The hikes for electric cars with minimal content changes are especially stark, however. Tesla increased the price of the Model 3 and Model Y, its electric vehicles for the masses, twice last year, amounting to a $6,000 increase on the Model Y. The lack of a Standard Range model further drove up the base price of its bestseller to above $60,000.
Update: This article has been updated to reflect the price lock for preorder holders.
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