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

[Inkedsphynx]

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

Agreed. Firing people doesn't teach anything but fear. Identifying the mistake and implementing processes to prevent future recurrence is so much more valuable. And in this case, no 1 person made this decision. Hundreds were aware or involved. Firing them all would be a very bad move.

Sponsored

 

[Venturamama]

So happy about this! We hadn't cancelled yet but were going to. Our future plans are back on!

 

[Trekkie]

Well, if we all just held on hoping, it probably wouldn't had played out this way. Those of us who cancelled applied the pressure. While I didn't cancel both my orders, I did cancel the one I was least in love with (family SUV) but would probably reinstate it. I left 'my' truck alone holding out hope.

But, as I said months ago if they raised the price on me I'd probably cancel, and I was about too, was watching the stock market and waiting for a reaction.

 

[RayzorBEV]

So, just checked my R1T and my R1S configurations and their prices did not reverted back to pre-March 1 price hike...

 

[indianriver]

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.

Yes, especially when the early deliveries keep driving up the good news. Besides - it is so becoming a rich world around here. A decade ago, I could not dream of dropping 60K on a truck. Now that is so common. So for the wealthy out there - they would not care if they missed out on the early pre-orders. They will go order it no matter what.

 

[pangpang77]

I think this came down to the number of cancellations they saw come in. Assuming they were counting on getting $15k x 80,000 orders (for simplicity sake) or $1.2B in increased revenue. But soon realized with assuming 50% cancellations, 40,000 x $80k or $3.2B in future revenue or almost half of their revenue would be gone in an instant. Imagine telling analysts that on the 3/10 earning call. They would get wiped out in 2 seconds.

 

[Inkedsphynx]

So, just checked my R1T and my R1S configurations and their prices did not reverted back to pre-March 1 price hike...

Just like the changes in the configurator weren't ready to go within 24 hours, the change back probably won't be either. It's more complicated than just un-switching a switch. It might take them a few days, even with them scrambling. Patience

 

[hed]

The troubling part for me is what I consider continual bad decision making from the company leadership. That does not bode well for the long term in my opinion.

Yes, the reversal was the right way to handle it, but if you drop the glass the least you are expected to do is clean it up.

I mean, come on, the bar is low here.

 

[kanundrum]

I readily admit that was my choice, but I now have to chose to eat that deposit or try to resell that vehicle if and when Rivian delivers.

Silver lining, our vehicles MAY have positive equity at delivery if a new one is 20% more.

 

[Friscorays]

So, just checked my R1T and my R1S configurations and their prices did not reverted back to pre-March 1 price hike...

It took some time for the increased pricing to be reflected and it will take some time for it to be reversed. I have screenshots just in case.....

 

[Bilbo]

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​

This is great news. I sure wish I was getting my emails from them like you guys. I have to get all my "news" from the forum

 

[LoneStar]

Man, makes me super-happy that I made a 2nd deposit about six weeks ago for a "base" R1S Explore that now will still come as a quad-motor. I knew then it would likely be late next year or into 2024 before it would manifest. Now it becomes a tremendous opportunity shall we say knowing it will cost far less and be more equipped. About the only "freebie" that I missed out on was choosing White paint.

 

[bd5400]

Just like the changes in the configurator weren't ready to go within 24 hours, the change back probably won't be either. It's more complicated than just un-switching a switch. It might take them a few days, even with them scrambling. Patience

Assuming it even changes back. I don't know how the backend of all of that works, but I would imagine that they would need to figure out how to have two different price systems in place for certain accounts in the configurator. Also, do we just have our prior configuration honored but pay more for price changes on newly selected options? That could be less than straight forward to implement if they have to mix old prices with new.

 

[Bilbo]

Until this is in my inbox, I don't believe it

Same here. Also, My configurator does not reflect this info

 

[Iwantatesla]

You did say not to cancel because decision might be reversed and those people that cancelled were taking a risk of not being let back in but if it were not for the overwhelming number of people that ignored that and did cancel, the reversal would not have happened. I thank those people.

Not entirely true. We’ll never know. My only point was don’t do a knee jerk reaction. For those that sold stock. The losses are now recognized you aren’t reinstating those positions.

also, there are people OUTSIDE of this forum that cancelled that are pretty large influencers and automotive publications shat on Rivian for this. Why put yourself through the agony and see how it plays out. I also stated it’s from my prior experience.With Tesla it was take the action first and then they figured out how to fine tune it. Not saying it’s right but like I said I’m sharing my experience.

Sponsored