The customer is always right.
Earlier this week, Rivian announced a 20 percent price hike for its two models, the R1T and R1S. That meant price tags of at least $67,500 and $70,000, respectively. Put another way, those prices match those of the current quad-motor versions. Rivian blamed the price adjustments on inflation and ongoing supply chain issues. Those who placed pre-orders were having none of it. The backlash was immediate and harsh as customers rightly expressed their anger on fan forums and other social media outlets.
Many were strongly considering outright canceling their orders. Fortunately, that won't be necessary. In an official press release, Rivian CEO and founder RJ Scaringe has announced the company is backtracking on those price jumps.
"Since originally setting our pricing structure, and most especially in recent months, a lot has changed," he said. "Everything from semiconductors to sheet metal to seats has become more expensive and with this we have seen average new vehicle pricing across the U.S. rise more than 30 percent since 2018. Given our build lead up times, we need to plan production costs not only for today, but also for the future."
All of that is true, but Rivian customers don't feel they should be the paying price. Scaringe continues:
"As we worked to update pricing to reflect these cost increases, 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, and we wrongly assumed the announced Dual-Motor and Standard battery pack would provide configurations that would deliver price points similar to your original configuration. While this was the logic, it was wrong and we broke your trust in Rivian."
Scaringe has now reversed those price hikes for those who've had a pre-order as of March 1, 2022. The original configured price will be honored. Looking ahead, Rivian's new dual-motor/standard battery pack configuration is intended to help the carmaker keep starting prices lower and, at the same time, adjust pricing for the quad-motor and bigger battery packs in light of inflation. Something had to give.
But fortunately, those who placed pre-orders, in many cases well over a year ago, will no longer be forced to pay a penny more. Future Rivian buyers, however, are not so lucky.