Rivian pulls a Tesla on the R1T price increase for early adopters, says those who cancelled their preorder can come back
Startled by the negative impact on its stock price and customer loyalty, Rivian's CEO walked back the announced drastic price hike of its R1T and R1S electric trucks. As soon as Rivian said it is increasing the price of the R1T even for those who preordered, a number of potential customers said they are giving up and cancelled their reservations, citing a new price of more than US$94,000 with all the options they booked upon preordering. That sent Rivian's stock into a nosedive and it dropped 25% in the two days after the 17% R1T and 20% R1S price hikes were announced. This left the CEO RJ Scaringe scrambling to mitigate the impact, and he announced that Rivian is cancelling the R1T and R1S price hikes for existing customers:
The costs of the components and materials that go into building our vehicles have risen considerably. 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. Given our build lead up times, we need to plan production costs not only for today, but also for the future...
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.
The apologetic press release says that those who preordered a Rivian truck before March 1 will be able to get it at the original price cited at the time, just like Tesla did a few months back when it had to raise the Model 3 prices. Those who cancelled their reservations after the clumsily handled price hike announcement will be able to walk back the cancellation and restore their order to the original trim and options level they picked at the original price, too.