EV startup Rivian is rolling back price hikes on preordered vehicles. This decision comes after lots of customer backlash.
In a letter published by the automaker on Thursday, March 3, CEO RJ Scaringe apologized to customers.
“I have made a lot of mistakes since starting Rivian more than 12 years ago, but this one has been the most painful. I am truly sorry,” he wrote. “Trust is hard to build and easy to break. In speaking with many of you over the last two days, I fully realize and acknowledge how upset many of you felt.”
Rivian Price Hikes Affected the R1T and the R1S
These price hikes affected two of the EV startup’s models. The price went up for the R1T pickup truck and the R1S SUV. The base price for the R1T went up from $67,500 to $79,500. The base price for the R1S went up from $70,000 to $84,500.
Rivian said that the price hikes were due to inflation, supply chain shortages, and just general rising costs.
“This rise in cost and complexity due to these challenging circumstances necessitate an increase to the prices of the R1T and R1S models we offer today — prices which were originally set in 2018,” Rivian chief growth officer Jiten Behl said in the statement announcing the original price increase at the time.
When prices went up for preorders, many Rivian customers got upset and canceled theirs. Some said that the cost of their vehicles went up by as much as $20,000. For example, one customer in Dallas had a preorder for an R1T that went up astronomically. His preorder price was originally $87,700. After the price hikes, it increased to $100,700.
When customers got Rivian’s email about the price hikes, they described it as being full of “corporate” jargon. And, of course, it was hard to accept. However, Scaringe’s apology landed better with their audience.
“The email this morning, that seemed more like the company I’ve been a fan of,” said one customer. “I thought it was a real class move. He took ownership of it.”
Scaringe said in his letter Thursday that the company didn’t communicate well about the price hikes. Rivian will honor the original configured price for anyone who pre-ordered a vehicle as of the March 1 pricing announcement. Customers who canceled their pre-order after the price hike will be able to reinstate it, with the original pricing and delivery timing, he said.
The EV Startup Has Had A Bumpy Ride
Since Rivian had its initial public offering in November, it’s gone through a lot of ups and downs.
On the plus side, Rivian’s R1T pickup truck has been named MotorTrend’s Truck of the Year. At times, the EV startup has even been valued higher than Volkswagen, Ford, and General Motors.
On the downside, CNN reports that the automaker’s stock has fallen by 50% this year. This latest price hike (and consequent price reduction) certainly fall under a “down” period. However, Rivian’s CEO says that their main focus is to build customer relationships. His apology might just win over a lot of their customer base.