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Rivian backtracks on $12,000+ price hikes after outrage from preorder holders

·3 min read
[EMBARGO 9/28 DNP] Rivian R1T
The Rivian R1T.Tim Levin/Insider
  • Rivian is walking back major price hikes for its electric vehicles after massive backlash.

  • New customers will still need to pay the new prices, but existing preorder holders are exempt.

  • Rivian upped prices on both models this week, citing increasing costs and supply-chain disruptions.

Following widespread customer backlash, California electric-vehicle startup Rivian backtracked on a decision to raise prices for most preorder holders by roughly 20%.

The pricing updates, which remain in effect for new customers, led to surprise hikes of around $12,000 to $20,000 for people who had already configured their vehicles at lower price points.

Rivian CEO and founder RJ Scaringe sent an email on Thursday to people who had reserved the company's R1T pickup truck or its forthcoming R1S SUV explaining the move. He said that the cost of materials and components that go into Rivian's vehicles has increased significantly, necessitating price hikes, but conceded it was wrong to ask those who had already placed a deposit for a vehicle to pay more.

"Earlier this week, we announced pricing increases that broke the trust we have worked to build with you," Scaringe said in the message to customers. "We wrongly decided to make these changes apply to all future deliveries, including pre-existing configured preorders. We failed to appreciate how you viewed your configuration as price locked."

Rivian will honor original pricing for anyone who preordered their vehicle before the March 1 price changes. Anyone who canceled their order after the increases can ask to be put back in line at their original pricing.

Rivian R1S
The Rivian R1S.Rivian

On Tuesday, Rivian changed up its pricing structure, effectively increasing the cost of its vehicles by around 20%. Now a four-motor R1T that would have cost $67,500 before March will run you $79,500, while the quad-motor R1S jumped from $70,000 to $84,500. Rivian also bumped the price of a slew of options, including paint colors and wheels.

It announced the introduction of cheaper, lower-specification models in 2024 that will match the vehicles' original prices. Rivian said inflationary pressure and supply chain shortages were to blame.

Some people who had already configured their Rivian vehicles saw their orders jump by $15,000 or close to $20,000, triggering outrage among preorder holders. Many aired their grievances on Reddit and Twitter, announcing they had canceled their orders or sold their shares in the company. Some longtime fans who had placed deposits as far back as 2019 said they were devastated by the news.

In late 2020, Rivian became the first in a new crop of EV startups to actually begin shipping vehicles to customers, followed by Lucid Motors. Both say they are struggling to ramp up operations amid major disruptions in the global supply chain. Lucid, for its part, recently cut its 2022 production target from 20,000 vehicles to 12,000-14,000, citing difficulty obtaining some components.

Shares of Rivian have slumped nearly 60% since they began trading in November.

Read the original article on Business Insider