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Rivian spares preorders from price hike to fix ‘painful’ mistake -Breaking

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© Reuters. FILE PHOTO: The company logo is seen on a Rivian R1T pickup, the Amazon-backed electric vehicle (EV) maker, as it is parked outside the Nasdaq Market site during the company’s IPO in Times Square in New York City, U.S., November 10, 2021. REUTERS/Brenda

By Akash Sriram

(Reuters) – Rivian Automotive Inc reversed price increases on electric cars booked prior to March 1st, days after customers reacted negatively following a 20 percent increase in the prices.

Customers who cancel orders after March 1, will be able to reinstate their order with the original price. Chief Executive Officer RJ scaringe stated in a Thursday letter that preorders from this date won’t be affected by the revised prices.

Amazon-backed Rivian R1T pickup increased in base price from $67,500 to $79,000. Rivian R1S SUV dropped to $70,000 to $84,500.

For orders made after the announcement, the prices unchanged

Scaringe said that price increases were caused by higher costs of components and inflationary pressures. According to Scaringe, the US average vehicle price has gone up by 30% in 2018 compared with 2018,

He wrote, “As our pricing was being updated to reflect the cost rises, we incorrectly decided that these changes would apply to all future delivery.”

Rivian started over 12 years ago and I’ve made many errors, but this was the hardest.

Many social media users took to the internet earlier in this week to complain that Rivian’s price hike was a betrayal to his early supporters.

Garrett Nelson, an analyst with CFRA Research said that “we think the damage is done” and that many customers will instead purchase EVs from other suppliers.

Rival Tesla (NASDAQ) Inc boss Elon Musk tweets Tuesday that Rivian’s “negative gross margin” will be shocking.

Tesla and other legacy automakers, which are pure-play EV manufacturers like Tesla, have also had the need to increase U.S. car prices in order to cover high logistic and supply chain costs. Due to vehicle shortages, dealers often increase prices.

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