The company’s logo is visible on a Rivian R1T pickup truck maintained by Amazon, an electric vehicle manufacturer (EV), as it was parked off the Nasdaq Market site during the Times Square IPO in New York, USA, November 10, 2021. REUTERS / Brendan McDermid /
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March 3 – Rivian Automotive Inc (RIVN.O) canceled price increases for electric vehicles booked before March 1 after facing a backlash from customers after a 20% price increase.
Pre-orders from March 1 will not be subject to the new prices and customers who have canceled orders can refund them with the original price, CEO RJ Scaringe said in a letter to customers on Thursday.
On March 1, the Amazon-backed company increased the base price of the Rivian R1T electric pickup to about $ 79,500 from $ 67,500, while the R1S SUV went up to $ 84,500 from $ 70,000. Read more
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Rising prices have prompted some customers to cancel orders and express disappointment, accusing the company of “betraying” its early supporters, according to social media posts.
“It was wrong and we broke your trust in Rivian,” Scaringe wrote.
“I’ve made a lot of mistakes since I started Rivian more than 12 years ago, but this one was the most painful.”
Shares of Rivian, which fell more than 13% on Wednesday, extended losses on Thursday, down 4%.
Scaringe reiterated that the rise in prices was caused by inflationary pressures and higher component costs.
Average prices for new vehicles in the United States have risen by more than 30% since 2018, when they began receiving pre-orders for RIT, he said.
Holders of reservations at Rivian welcomed the move.
“I’m back with Rivian. Super sincere apology from RJ and they’re doing well,” said Zach Jump-Start Marino, who canceled his pre-order after the price increase.
“100% trust and confidence have been restored. This is the right move,” tweeted Zach Nelson, who made a reservation for R1T in 2018.
The new prices will remain in force for orders placed after the announcement.
“We believe the damage has been done and instead many customers will be buying electric cars from competitors,” said Gareth Nelson, an analyst at CFRA Research.
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Report by Akash Sriram in Bengaluru and Hyunjoo Jin in San Francisco; Edited by Saumyadeb Chakrabarty, Shinjini Ganguli, Devika Syamnath and Cynthia Osterman
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