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

[gd_r1t]

I'm back on board. This is a really positive step to regain trust. Like RJ said, trust is built over years but can be lost in a single day, so this is not the end of the road by any means. But for now, I do feel RJ and Rivian deserve recognition for their own recognition here. Props and thank you Rivian team!

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[indianriver]

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​

Thank you RJ. Thank you Rivian! Thanks for appreciating what you and all of us are trying to build up.

 

[LaunchGreen]

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.

THIS!!! All they had to do was call 20 preorder holders.

My company has a small group that opt in to try new things and are on NDA - easy feedback and avoids mistakes like this.

 

[911Safari]

Certainly glad RJ reversed the price hike…I’m still in…but everyone should remember…RK raised millions of dollars from investors based on the deposits we gave him. The loss of a serious number of our deposits would have meant no more new investors. As much as I want to thank RJ, this was a forced move.

 

[greensun]

I'm back in. Thank you RJ!

 

[mini2nut]

Thanks RJ for doing the right thing. I am reinstating my canceled order!!!

The amount of cancellations must have been huge. Not only that, but the PR backlash was tremendous.

This pricing reversal will also put pressure on the Tesla to keep Cybertruck pricing "affordable".

 

[Gsxr150]

You guys, before you get too excited about a discounted truck with instant equity, remember a ton of us were going to cancel because we couldn't afford the truck anymore. AND no one wanted to compromise for a lesser truck.

You think this logic won't apply to all other prospective buyers in the future?

Yesterday ICE trucks suddenly became compelling at half the cost. Now your sweeping yesterdays logic under the rug as of people are going to line up to pay 90k for a pickup truck.

 

[Inkedsphynx]

Not true...see my post above.

Plenty of 90k+ cars sell all the time. Like tons of them. There will be plenty of market for these even at the higher prices, especially when every other auto manufacturer raises their prices too. It's not like people are just going to stop buying vehicles all-together.

It's not a directly fair comparison to say things like 'plenty of us cancelled because of the price' - we were also factoring in that it was a price INCREASE. If we all started this journey over today from day 1, plenty of those people would have been fine with the higher price - it was the way they got there that made them say it was no longer worth it at that price'.

Range Rovers. Porsches. Maseratis. Higher end BMWs. Higher end Teslas. Hell, even some of the bigger ICE trucks can option pretty damn close to 100k. There's tons of vehicles that sell in this price point. Maybe not in Minnesota, I can't speak to that. Plenty in Washington though ?

 

[Canthoney]

Everyone on this forum right now:

 

[Rivian635]

Check the email guys. Here is what I got.

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

Not sure if this was a blunder or marketing genius?! Now we all feel like we have a great deal - going back to her original prices …oh well, all is well that ends well!

 

[Eticket99]

So definitely welcome news this AM, and not terribly surprised given the bait and switch metrics. They could have increased pricing but just not so much across the board.

I didn't cancel but did change m configuration to eliminate things I didn't need (paint and AT) to lower the price from $91--> $86k, wonder if they'll give me back my original config at the cheaper pricing ($77,300), would believe they will but we'll see.

 

[svet-am]

I am anxious to see how they handle those of us that had the Off Road package configured now that they have split it into two parts. I haven't touched my configuration since they split it and they are going to need to make the two hooks AND the underbody shield go back into my account at the same price. That's why I took a screenshot of my configuration before they updated it.

 

[ericolson32]

I'm glad he reversed his decision. But the "broken trust" he mentioned is real. If Rivian is willing to suddenly jack up prices 20%, what else are they willing to do? The character of the company is now in serious question. I'm keeping my reservation for now, but have to admit I'm suspicious of RJ and team.

 

[paariv]

You guys, before you get too excited about a discounted truck with instant equity, remember a ton of us were going to cancel because we couldn't afford the truck anymore. AND no one wanted to compromise for a lesser truck.

You think this logic won't apply to all other prospective buyers in the future?

Yesterday ICE trucks suddenly became compelling at half the cost. Now your sweeping yesterdays logic under the rug as of people are going to line up to pay 90k for a pickup truck.

I think that there’s still demand for the truck at 90k, especially in these early months when Rivian can’t make enough to fill all orders. Lots of rich people who can weigh “deposit now and pay 95k+ in 2 years, if they don’t raise prices again” vs “get it now for 95k” and make the easy call to hand us a 15-20k profit.

 

[jtshaw]

Others have hinted at it, but as part of rebuilding my trust, a head needs to roll for this. Someone advocated for and pushed the approach of immediate price increases. RJ signed off but he isn't going anywhere so he needs to kick someone else to the curb if he wants to show he's really learned a lesson.

FWIW, I’d much rather see real mechanisms for customer transparency rather than firing somebody. A failure this big is on the entire executive team and it feels like a deflection of responsibility to fire one person for it.

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