? RJ's Letter -- Making it Right -- REVERSING THE PRICE CHANGE FOR PREORDER HOLDERS

[Batman]

Had a feeling after the backlash and stock price drop they would do this. Glad I didn't cancel order but was planning on cancelling if new price structure stuck around for folks who pre-ordered...

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[bac4uw]

@SeaGeo Will you be editing your signature??!! ?

 

[astonius]

This reversal should not be applied to the apologists who were happy to pay the new prices

 

[rraj2k81]

Oh to be a fly on the wall of whatever conference call came before this email.


Did they elect to gamble, and end up losing real hard...

Or did they actually really have a group consensus that their initial strategy was a sensible business decision that customers would be fine with?

The latter is unfathomable, but simultaneously unsurprising. Have worked with too many accountants who are in decision making roles that actually require more thought than looking at the balance sheet...

I really think this was a calculated approach. RJ's email read like that.

"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."

So they knew what they were doing. They either thought, people would lay down and take the 20% price increase and or expected there would be some cancellations.

But never expected the level of cancellations or blowback and the public scrutiny, to this extent, That they had to reverse course.

 

[ATL_R1S]

Bought some swag from their gear shop as a way to say thanks from us preholders!

Same! SELL THEM OUT!!!

I actually removed two shirts from my Amazon wishlist yesterday because I didn't want to wear them anymore if I wasn't going to follow through with my R1S pre-order. Just bought them a few minutes ago to show my support and thanks for making things right. I'm happy to rock a Rivian shirt now that they've kept the dream alive for me and my family. Also bought a shirt from the RivianStories shop since those guys deserve our support as well. They kept the pressure on for the past couple days and really expressed how we all felt.

 

[TJM]

Hello Everyone, Earlier this week, we announced pricing increases that broke the trust we have worked to build with you. Since originally setting our pricing structure, and most especially in recent months, a lot has changed. The costs of the components and materials that go into building our vehicles have risen considerably. 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% since 2018. Given our build lead up times, we need to plan production costs not only for today, but also for the future. 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. We also didn’t manage communications well. We didn’t give you enough insight into what was driving these decisions. The most important aspect of what we are building is our relationship with all of you. As we demonstrated earlier this week, 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. 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 and committed to rebuilding your trust. One of the things we talk about a lot internally is that we will make mistakes – it’s part of building something complex. The key is to learn from them and address them when they are made. It is how we grow. We made a mistake in how we approached our pricing changes, and what is important now is that we fix it. For anyone with a Rivian preorder as of the March 1 pricing announcement, your original configured price will be honored. If you canceled your preorder on or after March 1 and would like to reinstate it, we will restore your original configuration, pricing and delivery timing. Our team will be sending an email in the next few days with more details. Regarding our updated pricing for future preorders, the introduction of our Dual-Motor configuration and Standard battery pack has been designed to enable us to maintain lower starting prices while adjusting the pricing of the Quad-Motor and larger battery packs to reflect rising costs. Building a durable business is core to the continued impact we can deliver as a company. We are focused on building a brand and products that will continue to scale to different vehicle sizes, use cases, price points and markets – this growth will only be possible with your support and continued feedback. Thank you for the personal notes and discussions I had with so many of you. Your feedback makes us better. RJ​

Hey, RJ, explore the concept of Focus Groups prior to making major decisions, particularly those that affect your customers. On a related subject, take a deep dive into your and your team’s decision making process.

 

[bhgoverman]

Good recovery. I was planning on cancelling but will now reconsider.

 

[Kaprice]

Congrats all you guys. Because of you, RJ got the message. I'm not surprised at the reversal, but I AM surprised that he's letting canceled pre-order to be reinstated. THAT's very cool.

So, the question is: Did he restore trust? Or has the damage been done?

 

[9527]

Now we all know how much they intended to raise the price. I wonder if I could change from an Explore to an Adventure now. At this price it’s a steal! Don’t wanna do anything stupid to affect my price.

 

[JKDU]

I wonder who is getting fired (or got fired) from this debacle?

Their Chief Growth Officer needs to go. Of course I don't know all the parties involved in these decisions but it seems like a lot of the mistakes are coming from his watch/leadership.

Glad Rivian and RJ got better feedback to make this right. I was really torn with supporting their mission and product but then feeling burned and that it was all just PR/Marketing talk to craft an image. Getting better leadership will go a long way in building my trust back to my original level.

 

[Gsxr150]

Dear Rivian,

It takes a lot to correct a mistake like the one we all experienced yesterday. We understand your logic and appreciate you seeing the issue from the customer's perspective. We understand that keeping prices down while working in the current economic landscape is a huge burden. We also appreciate the acknowledgement of the need for better communication in the future.

When I worked in sales my boss used to say the most important thing for me as a new business person was to create an army of people who love you. Consider us enlisted, you guys clearly care and want what's best for us all!

They have a lot more work to do to earn our trust back. Not about freebies and price at this point.

 

[rraj2k81]

Oh to be a fly on the wall of whatever conference call came before this email.


Did they elect to gamble, and end up losing real hard...

Or did they actually really have a group consensus that their initial strategy was a sensible business decision that customers would be fine with?

The latter is unfathomable, but simultaneously unsurprising. Have worked with too many accountants who are in decision making roles that actually require more thought than looking at the balance sheet...

I really think this was a calculated approach. RJ's email read like that.

"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."

So they knew what they were doing. They either thought, people would lay down and take the 20% price increase and or expected there would be some cancellations.

But never expected the level of cancellations or blowback and the public scrutiny, to this extent, That they had to reverse course.

 

[NooterIA]

This makes me nervous if Rivian will use subscription service to slowly pull back features unless you sign up and since that will be a slow drip, there will not be an uproar that makes them change course.

Exactly my thought. I'm in sales too and often include things up front that appear to be "included" or "free" , but nothing is free. There are different ways of making up revenue for what appears to be free. I was thinking I could see them making up this revenue in their subscription expenses.

 

[Gsxr150]

This reversal should not be applied to the apologists who were happy to pay the new prices

100% sir. Spot on.

 

[LeoH]

Which means now you can buy stock at a very low price, and you get a 95K car for 78K, so you could turn around and resell it right away for 120 or more probably.

And if you do not sell your R1, you could probably own it for a couple of years and still maintain a sticker price

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