Rivian raises prices and backtracks a bit
US-based electric car startup Rivian has raised prices for its first two models, the R1T and R1S, by up to 20 per cent; initially not only for new customers but also for existing reservation holders.
++ This article has been updated. Kindly continue reading below. ++
The communication was not a happy one: In an email to customers, Rivian presented it as if only some features were being changed – they would receive another email when the update was completed in the Rivian account. But there, customers then saw that the currently built variant with four engines has become $6,000 more expensive. In addition, the quad motor can no longer be combined with the standard battery pack since that version is only available with a dual-motor all-wheel. So if you want the quad motor, you’ll have to go with the ‘Large’ battery pack for another $6,000 upcharge.
Rivian told Electrek the increase was due to “inflationary pressure on the cost of supplier components and raw materials across the world.” “This rise in cost and complexity due to these challenging circumstances necessitate an increase to the prices of the R1T and R1S models we offer today — prices which were originally set in 2018,” said Jiten Behl, chief growth officer.
After many pre-order customers apparently cancelled their reservations as a result, Rivian later rowed back and is rescinding the price increases, at least for orders already placed. “For anyone with a Rivian preorder as of the March 1 pricing announcement, your original configured price will be honored. If you canceled your preorder on or after March 1 and would like to reinstate it, we will restore your original configuration, pricing and delivery timing,” CEO RJ Scaringe wrote in a letter released specifically because of the cancellations.
Scaringe stated that it was a mistake to apply the new prices to pre-orders as well. “We did not understand how you considered your configuration to be priced, and we incorrectly assumed that the announced dual motor and standard battery package would offer configurations that would offer similar pricing to your original configuration. Although that was the logic, it was wrong and we broke your trust in Rivian,” Scaringe said.
He announced that pricing for the dual motor with standard battery pack would remain low – but that they could “simultaneously adjust pricing for the quad motor and larger battery packs” “to reflect rising costs.”
Update 09 March 2022
The hefty price hikes at US electric car start-up Rivian, which were at least partially reversed a short time later, are now leading to a lawsuit alleging misleading investors. In a statement of claim filed in US District Court in San Francisco on Monday, shareholder Charles Larry Crews alleges that Rivian failed to tell investors in a timely manner that it had priced its first R1T and R1S models too low.