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Rivian raises vehicle prices by 20%, sparking customer ire -Breaking


© Reuters. FILEPHOTO: The Nasdaq Market Site in Times Square is where a Rivian R1T pickup sits. It was parked there on November 10, 2021. REUTERS/Brendan McDermid

By Hyunjoo Jin

SAN FRANCISCO (Reuters), Rivian Automobile Inc, a U.S. startup for electric vehicles, said Tuesday it raised the selling prices by around 20% as a result of inflationary pressures. Some customers were upset that this was due to higher components costs.

Rivian is owned by Inc. (NASDAQ) at 20%. It stated that its R1T electric pickup trucks have seen their starting price increase by approximately 17% while its R1S sports utility vehicles increased by around 20%. The company stated that the increase in price would impact most customers who had already pre-ordered the vehicles.

“Well, that’s sad. Cancelled Rivian orders. So bummed,” Zach Jump-Start Marino said in a Facebook post that he lived in Georgia and held Rivian shares.

The price increase was unfair to early supporters as well as pre-order holders. He said he would not pay 94k+ to buy a truck of “mid-size”. However, he added that he could purchase gasoline pickup trucks like Ford Motor’s F-150 at much cheaper prices.

He stated to Reuters that the R1T cost has increased by $15,000 and included options.

“Like most manufacturers, Rivian is being confronted with inflationary pressure, increasing component costs, and unprecedented supply chain shortages and delays for parts (including semiconductor chips),” Jiten Behl, Rivian’s chief growth officer, said in a statement.

Due to supply chain constraints, the startup from California fell short of its production targets last year.

Tesla (NASDAQ:) Inc. and other legacy car manufacturers have raised U.S. prices in order to offset logistics disruptions and high supply chain costs. Dealers often increase prices due to vehicle shortages.

Elon Musk is the chief executive at Tesla. He tweeted “Their negative Gross Margin will be Staggering” to respond to Rivian’s price increase.

Rivian stated that the price of some options, such as paint, wheels, and upgrades such as reinforced underbody protection have increased.

Rivian R1T’s base price is increasing to $79,500. It was $67,500 before. Rivian R1S starts at $84,500.

Rivian announced that the R1T model will be introduced with a lower-range battery pack, dual motors and a pricing structure of $67,000.

Rivian’s former head for sales and marketing, Laura Schwab claimed in a November lawsuit that the company was facing that there had been “gender discrimination, retaliation”, and “the vehicles were overpriced and every sale would cause a loss for them.”

According to her, the plaintiff raised the topic with Rivian executives. Behl also acknowledged the need to increase vehicle prices “after” the November IPO.