Nearly two days after electric vehicle maker Rivian significantly increased prices and essentially repositioned its R1T and R1S electric trucks, it has agreed to apply the original price to those who have already booked.
The price changes, which essentially forced early bookers to either pay up to 20% higher prices or accept a used truck, were not well received.
In a Thursday alphabet To customers and the public, Rivian CEO RJ Scaringe apologized for the pricing mistake, which he said “broken the trust we’ve worked to build with you.” He announced that those who had pre-orders as of the date of the price change of March 1st will be applied the originally configured price, while those who have canceled their order after the price change can restored to original price, configuration and delivery time.
2022 Rivian R1T
On Tuesday, Rivian raised prices to $12,000 for the high-displacement, four-wheel-drive versions of the R1T and R1S. The higher rates apply not only to new bookings from then on, but also to anyone who hasn’t shipped or completed a purchase.
Rivian’s foray into this comes in the form of the addition of dual-engine versions with a smaller Standard package (“260+ mile range”, compared to the Big Pack’s 314 or 316 miles), which bookers advance can get around the original price point — essentially downgrading the car’s expected specs or asking for more money.
Many Rivian owners feel ambushed; Some have canceled their orders and many have complained publicly on Tuesdays and Wednesdays.
Rivian CEO and Founder RJ Scaringe
Scaringe deeply apologizes to those customers: “In speaking to many of you over the past two days, I fully realize and admit that many of you have felt as uncomfortable as how. I’ve made a lot of mistakes since starting Rivian over 12 years ago, but this one is the most painful. I sincerely apologize and pledge to rebuild your trust.”
“The cost of the components and materials to build our vehicles has increased dramatically,” said the CEO. “Everything from semiconductors to sheet metal to seats is becoming more expensive, and with this, we’ve seen the average new car price across the US increase by more than 30% since 2018.”
The price hike on these trucks has been widely anticipated and the issue here is simply how it is enacted. Lower prices for “early entrants” can make them feel more like the brand — like early Model S buyers and pre-orderers.
Customers might react differently if Rivian is a struggling startup; but the company is cash-strapped and has planned a second assembly plant.
2022 Rivian R1T
The move, on the other hand, is more than just end-consumer pricing for some much-anticipated models. It sets the stage for a new brand — one that for many people comes down to is trust in service and support. Scaringe spoke of a “logic” that the company has followed internally — implying that these swings and price swings happen on a weekly or monthly basis and perhaps underscoring the lack of transparency and communication.
That’s what the company should have done in the first place, but with Scaringe’s slick answer, it’s not too late to make amends.
Do new brands and startups owe a deeper level of price transparency? Let us know what you think in the comments section below.
