Rivian reverses course on price hike for reservation holders
- Nathan Bomey, author of Axios Closer
A Rivian EV in Anaheim, California, on Feb. 5. Photo by Daniel Knighton/Getty Images
They take it back.
What’s happening: Startup electric vehicle maker Rivian irked reservation holders earlier this week by hiking the price of vehicles they were set to buy — only to reverse course today after an outcry.
Why it matters: Automakers have been quick to embrace reservations, which bring the benefits of deposit cash flows and efficient planning. But inflation could throw a wrench in those plans as production costs balloon unpredictably in the time since customers placed their orders.
Details. Rivian acknowledged in a letter to customers that it “broke the trust that we have worked to build with you” and “wrongly decided” to make price increases retroactive to past reservations.
Between the lines: Facing inflation, Rivian had planned to increase the price of the R1T pickup from $67,500 to $79,000 and the R1S SUV from $70,000 to $84,000.
- “They know they’re probably going to have to charge more to remain profitable because of what it’s going to cost to produce their vehicles,” iSeeCars analyst Karl Brauer tells Axios.
- The company's stock has lost about one-sixth of its value this week as it's see-sawed from price hikes to no price hikes.
Our thought bubble: Startup EV companies like Rivian and Lucid Motors have enjoyed a honeymoon period, but customers will revolt if they're not treated fairly, no matter the company.
- “The last thing you want to do, when perception might suggest that things aren’t going your way, is appear desperate,” Brauer says. “Desperation in any relationship is one of the least attractive characteristics.”