Rivian order holders force company to uphold original prices

UPDATE, March 7: Rivian has done an about-face, announcing it will honour its original pricing for customers who had placed orders prior to March 1, 2022.

Rivian received widespread backlash following its decision to increase prices of its R1T electric pick-up and R1S electric SUV by up to 20 per cent last week, applying the price hike to customers who have ordered their vehicles but haven’t yet received them.

"Since originally setting our pricing structure, and most especially in recent months, a lot has changed," Rivian CEO and founder RJ Scaringe said in a statement.

"Everything from semiconductors to sheet metal to seats has become more expensive and with this we have seen average new vehicle pricing across the US rise more than 30 per cent since 2018. Given our build lead up times, we need to plan production costs not only for today, but also for the future,” Scaringe said.

"As we worked to update pricing to reflect these cost increases, we wrongly decided to make these changes apply to all future deliveries, including pre-existing configured preorders. We failed to appreciate how you viewed your configuration as price locked, and we wrongly assumed the announced Dual-Motor and Standard battery pack would provide configurations that would deliver price points similar to your original configuration. While this was the logic, it was wrong and we broke your trust in Rivian."

Prior to the backflip, a poll conducted on the Rivian Reddit forum suggested more than half of those with pre-orders would not proceed with their purchase due to the price change.

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The story to here

March 3: US electric vehicle start-up Rivian has announced it’s raising the prices of its two models.

The quad-motor R1T electric pick-up truck has gone up by 17 per cent to US$79,500 (AU$109,400), while its SUV-bodied sibling, the R1S, has jumped from US$70,000 to US$84,500 (AU$96,300 to AU$116,200) – an increase of 20 per cent.

Rivian is applying the price hike to all existing orders, or giving customers the option to change their vehicle to a lower specification, and with a significantly longer wait time.

“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's chief growth officer Jiten Behl said in a statement to Reuters.

In an attempt to offer more affordable options, Rivian is offering dual-motor R1T and R1S variants with decreased performance and a smaller battery pack, priced from US$67,500 and US$70,000 respectively. However, it’s understood these vehicles won’t be delivered until 2024.

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The five-seater R1S has also been dropped from the line-up, with seven-seater models only being offered.

The company has received widespread negative feedback from customers holding reservations, with a number announcing they would be cancelling their orders due to the price change.

Tesla CEO Elon Musk also commented on the news, writing on Twitter: “Our primary challenge is affordability. Creating an expensive truck is relatively easy. If it is extremely hard [for Tesla to make a cheap truck], despite our much greater economies of scale and better technology, then it is damn near impossible for others.”