Rivan Backtracks On Price Hike In Face Of Customer Outrage, But New Buyers will still Pay More

Rivan Backtracks On Price Hike In Face Of Customer Outrage, But New Buyers will still Pay More

Electric startup Rivian has backtracked on planned price rises in the wake of outrage from customers who had already placed orders but were still awaiting delivery.

Earlier this week the EV firm announced that prices for its electric truck and SUV would increase by around 20 percent, taking the price of the R1T pickup from $67,500 to $79,500, and inflating the cost of the R1S SUV from $70,000 to $84,500. The company put the move down to increased production costs.

But Rivian’s CEO today announced that customers with existing orders made before March 1 would still be able to purchase their Rivian at the original price. “Earlier this week, we announced pricing increases that broke the trust we have worked to build with you,” boss, RJ Scaringe, said in a statement.

Scaringe also confirmed that anyone who has cancelled an order in response to the earlier announcement about price increases could reinstate it and pay the original amount. Rivian’s customer service team would be sending an email out to affected parties in the next few days, he added.

Related: Rivian Pushing Ahead With $5 Billion Georgia Plant Despite Opposition From Some Locals

The statement explained that the cost of components had increased considerably since Rivian set out its original pricing structure, and referenced a rise of 30 percent in the cost of the average new vehicle in the U.S. since 2018. But Scaringe admitted that the way the price rise was handled and communicated could have been better.

“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,” Scaringe said. “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 Dual-Motor truck Scaringe mentions is a simpler version of the current quad-motor R1T that the company plans to introduce in 2024. The smaller battery will deliver around 260 miles of electric driving range and allow Rivian to cope with inflated production costs while still offering a vehicle at the $67,500 the truck cost when it was originally hit the market in 2021.

Leave a Reply