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

[Cavalryscout18]

Wooooooow!!!!! That was an astronomical fail. I thought they had made a crude but savvy business decision but man, the reversal was swift and frankly, a little unexpected. Initially, I was 100% sure I would pay more than the price in the configurator (not 20% more) but certainly not locked in at those initial prices. With this blunder, they pretty much ruined any chance they had to increase prices for any of us who preordered. Such a bad move. I would have been fine with a $5-8k market adjustment (and would have expected it) when I get my R1S in 2023. But now with that letter, seems like we are locked in at those low price points, which is insane! Good thing I was too lazy to cancel my reservation or even change my reservation. I hope this doesn’t bankrupt them now. We still need them to first deliver the vehicles and then service them after. They should have hired outside firms to help vett this. Such a publicity nightmare. And if they did hire someone and this was their plan, then they should fire them pronto. Great way to start the day.

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[pcrampton]

Here is the Automotive News story:
3/3/22, 10:30 AM There may be more to Rivian's price hike than materials costs https://www.autonews.com/retail/there-may-be-more-rivians-price-hike-materials-costs

thats behind a paywall.

 

[crashmtb]

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

I don't know that anyone would be happy to pay the new price, having known the original one.

 

[corndog]

I'm stoked!! Very complicated decision I'm sure. But he made it. Good for you RJ. CEO's don't do stuff like this these days. For RJ it's not all about the money yet. Good for him.

I didn't cancel right away, trying to let my anger subside and not make a rash decision.
Glad I waited a minute.

 

[crashmtb]

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.

I was always taught that no one is fired just for making a mistake. as you said, it doesn't accomplish anything.

 

[ads75]

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.

I don't think anyone needs to be necessarily fired for what was likely a group decision, that was based on what they thought was best for the business. And you never know if that person, or group of people, had been advocating for increasing gradually prices all along. A decision was made, customers reacted, and another decision was made.

 

[pcrampton]

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?

Time will tell.

They will have to make all their deliveries as scheduled and miss no commitments to win this blunder.

Another missed promise/ commitment could be the end of Rivian.

 

[Iwantatesla]

Y'all wild ??

Your signature is killing me

 

[LeoH]

I don't know that anyone would be happy to pay the new price, having known the original one.

It will take time but eventually they will buy. Look at the model 3, it went from 34990 to 44990 for the base model. Eventually people forgot, and they do not even get a 7500 tax credit.

I agree with your statement as of now, but I think it's going to depreciate in truth eventually.

 

[Rich Truett]

thats behind a paywall.

This is the gist of it:

"Laura Schwab, in a lawsuit against the company, said one reason she was fired is because she questioned Rivian's pricing. The R1T electric truck's starting sticker price of $67,500 was too low, Schwab said in her suit. Rivian was on the cusp of launching its IPO and had already booked thousands of orders for its pickup.

Her suit says: "First, it was clear that the vehicles were underpriced, and each sale would result in a loss the company. Ms. Schwab ultimately contacted Dennis Lucey, Rivian's Finance Director, and worked with him to develop projections showing how much of a loss the company would incur if Rivian did not raise prices. Ms. Schwab raised this issue with several executives, including Mr. Behl, Stuart Dixon (Director of Product Management), and Andy Zicheck (Principal Product Manager).


"Mr. Behl brushed her off. Eventually, Mr. Hunt raised the issue with Mr. Behl, at which point Mr. Behl agreed that they would need to raise the vehicle prices after the IPO."

 

[Friscorays]

....With this blunder, they pretty much ruined any chance they had to increase prices for any of us who preordered. Such a bad move. I would have been fine with a $5-8k market adjustment (and would have expected it) when I get my R1S in 2023. But now with that letter, seems like we are locked in at those low price points, which is insane!

That is the funny thing. Many of us have been expecting a modest price increase.

 

[fotoflux]

Not true...see my post above.

One thing I have learned, no matter how much money I make, someone is always making more than me. The market may be smaller for people wanting a 6 figure car, but it's there. There are definitely more than 70,000 people in the US that would buy a Rivian at 6 figures, especially the R1S considering there is nothing like it on any other manufacturers' roadmaps. Show me a 3 second 7-seater with usable cargo space on the horizon anywhere else...

 

[Ralph]

I don't think this reversal had anything to do with cancellations or trying to gain back trust of their loyal customers. It had everything to do with people selling their stock in RIVN. RJ and Rivian are first and foremost concerned about the stock price. Their market cap went down by about $10 billion because of this price increase decision! That is a far greater hit than selling 50,000-70,000 pre-orders at a loss.

Don't get me wrong, this is AMAZING and I am thrilled once again have my pre-order. But Rivian is a public company now; they must look out for shareholders FIRST...Not customers. Don't forget that.

Those two are often NOT mutually exclusive. For a decade or more a multitude of Amazon shareholders whined because Amazon "was not making itself profitable". Why? Because they plowed everything back into growth and better and better customer experience (Prime, etc.). Short term thinking and/or analysis with horrible assumptions can cause a lot of problems, including this ill advised price increase.

There is more than one person at Rivian that needs to go.

 

[radiopaul65]

Yeah! What a roller coaster this past 2 weeks have been (Putin, Rivian, life in general!)

 

[kanundrum]

Your signature is killing me

hahahahahaha

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