Rivian received massive pushback after announcing earlier this week that it was increasing vehicle prices across the board, including R1T pickups and R1S SUVs that had already been pre-ordered. Some buyers reported upcharges exceeding $15,000 for the same configuration. Now, after all this widespread criticism, the Amazon-backed automaker has confirmed it's reversing course and will now honor the pricing for reservation holders.
"Earlier this week, we announced pricing increases that broke the trust we have worked to build with you," begins an email from Rivian CEO RJ Scaringe to reservation holders. "Since originally setting our pricing structure, and most especially in recent months, a lot has changed. 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 percent since 2018."
It later continues:
"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. Our team will be sending an email in the next few days with more details."
Scaringe also acknowledge that while Rivian was attempting to offset rising costs, which a former executive warned would result in a loss for each vehicle the automaker sold before the company went public, it made mistakes while doing so. He also acknowledge the company's poor communication and missed customer expectations.
Realistically, the walk-back seems to have come from two days of negative attention from both reservation holders and investors. Hundreds of angry forum-goers and Redditors announced that they were canceling their reservations. So many, in fact, that Rivian's own customer service was seemingly overwhelmed with negative attention or even defaulting to offer pre-order cancellations as part of their initial responses.
When asked how many reservations cancellations occurred since the announcement, a Rivian spokesperson declined to comment.
To be clear, this pricing walk-back only applies to those who have already preordered an R1T or R1S. New customers will still be on the hook for increased vehicle costs, which still brings into question the initial reason for many cancellations: value proposition. Stock prices continue to plummet despite Scaringe's note, resulting in another nine percent drop within the first few hours of the market opening on Thursday.
It's not immediately clear how this decision will impact Rivian financially in the long term. Rivian previously announced that it had a combined reservation count of 71,000 vehicles, meaning that the cost to keep customer loyalty may end up being a hefty price to pay.
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