Tech

Rivian backtracks on EV price hikes after customers cried badly

Rivian rolled back price increases for electric vehicles booked before March 1 on Thursday, days after customers faced backlash after a 20% price hike.

Prices for pre-orders beginning March 1 will be reset to the previous price and customers who have canceled orders will be able to have them restored, Chief Executive RJ Scaringe said in a letter to customers.

Shares of the Irvine, Calif.-based company lost over 6% in early trade.

The Amazon-backed company said on Tuesday it had increased selling prices of its vehicles by about 20% due to inflationary pressures and higher component costs.

Scaringe said the cost of components and materials that go into building vehicles has increased significantly, from semiconductors to sheet metal to seats. Average new car prices in the United States have increased more than 30% since 2018, he said.

“As we worked to update prices to reflect these cost increases, we erroneously decided to apply these changes to all future shipments,” he wrote.

Rivian R1T electric pickup truck on display at a car show
Rivian had planned to increase the base price of the Rivian R1T electric pickup from $67,500 to about $79,500 before deciding to back down after customer complaints.
SOPA Images/LightRocket via Getty Images

“We have to plan the production costs not only for today, but also for the future.”

The price hike also prompted comments from Elon Musk, CEO of competitor Tesla, who tweeted that Rivian’s “negative gross margin will be staggering” and that it’s “almost impossible” for other companies to make affordable electric pickups.

Under the previous plan, the base price of the Rivian R1T electric pickup truck would have increased from $67,500 to approximately $79,500, while the R1S SUV would have increased from $70,000 to $84,500.

Representation of Elon Musk's tweet
Following Rivian’s news of the price hike, Tesla CEO Elon Musk tweeted that his rival’s losses would be “staggering.”
Twitter

Scaringe said the price hikes “broke the trust” the company had built with customers. Many users were quick to take to social media earlier this week and said the price increase was a “betrayal” of Rivian’s early supporters.

“I’m back with Rivian. Super sincere apologies from RJ and they’re doing fine,” Zach Jump-Start Marino, a Rivian customer who previously canceled their reservation after a $15,000 price increase, said on his Facebook page.

https://nypost.com/2022/03/03/rivian-backtracks-on-ev-price-hikes-after-customers-cry-foul/ Rivian backtracks on EV price hikes after customers cried badly

JACLYN DIAZ

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