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

[Iwannarivian]

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​

Configurator still reflects the raised pricing for me as of 10:20 AM CST…. Shows base price of LE as $85k.

Sponsored

 

[7Ryder]

YAAAAAAAS!!!

So we gonna have a thread 50+ pages long about how awesome Rivian is now?

No, because they never should have done the price increase to reservation holders in the first place.

I think they are doing this for three reasons -
1) the price increase (and the reaction/cancelations) made them look bad and they lost a lot of brand equity (not to mention market cap)
2) they were probably looking at an SEC investigation into their honesty leading up to the IPO (maybe still will be facing this)
3) organizations/individuals with a large stock position are probably pissed off about the stock's performance before this debacle and even more so after the price increase announcement. I'm sure Board members were involved in getting this straightened out.

Still leads me to believe that RJ doesn't have a clue about leadership as well as how to treat customers correctly. I bet we see some changes in the leadership team.

 

[kurtlikevonnegut]

So now all those folks who joined or posted for the first time to tell us all they were cancelling are going to double their post count to tell us they are back in right?

 

[pkatz22]

i'm really tired of this comms thrashing. The outcome is exactly what it should be, yet we feel like we got something. At this point, my expectations are that Rivian will not do what it says it will do. So, how can we get comfortable buying a first edition vehicle when the company has been so poor in comms and considering loyal fans?

 

[tnawara]

Hidden between the lines in RJ’s email:

“In order to make up for the losses we’ll incur by allowing pre-March reservation holders to purchase at previous prices, the monthly Membership charge (mandatory to drive your Rivian) will start at $500. Stay adventurous!”

 

[notdeadyet]

Is there a difference between "preorder" and "reservation holder?"

I have a max pack with an ETA of Jan 2023 but my pricing in the configurator still shows the increased pricing.

 

[krb1183]

This was a welcomed surprise this morning. I had cancelled my R1T after the price hike. It was difficult as I had been waiting for so long, and my delivery window was finally due to arrive in July. When i saw my price jump 17k, it was disheartening and frustrating. Even though I understood the company needed to raise prices, i thought they should honor pre-order holder pricing. Now I'm left wondering if I jump back in to my original configuration, or I just cut-bait with my Rivian at this point. We'll see after I get the email in a couple days.

 

[Texasrivian]

I am talking with customer service through chat and they are adding my order to a reinstatement list. The rep mentioned that I will get my deposit refund still as that is being processed and will not need to pay the 1,000 deposit again for reinstatement. I feel that is wrong, but that is what was stated to me. A email within the week should be sent out about the order being reinstated.

 

[hilld]

I am probably going to have CS reinstate my order, but I will be sleeping with one eye open.

 

[bd5400]

Is there a difference between "preorder" and "reservation holder?"

I have a max pack with an ETA of Jan 2023 but my pricing in the configurator still shows the increased pricing.

Everyone is still seeing old pricing. Just give it time until we hear how they will implement the rollback.

 

[Spiffster]

Those emotions led to cancelations, and it was those cancelations that most likely led Rivian to reverse its course

True. The one case where emotionally reactive people actually helped the rest of us out.

 

[Bilbo]

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

I waited for 40 minutes in a chat with Rivian and "Confirmed" (I have a copy of the chat) "Prices for preorders before March 1st WILL BE HONORED"

 

[AdamsFan1983]

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

Did you pull the trigger, are you trying to back out of a replacement. I really don't want to take a bath on a year old truck if I decide to take the rivian.

 

[BobK]

I'm hoping his next email he will promise to get the RIVN share price restored

 

[R1T7777]

What a roller coaster, eh? Here are my thoughts as an early pre-order, but not launch edition holder:

I am stretching just a bit financially to get a vehicle that checks very nearly all the boxes, from a company I believe(d) is trying to do the right thing.

There are really no comparable products to cross shop, so the choice for me was either get the R1T or just get whatever other affordable EV when we need to replace our old Leaf.

The price increases hit me in two ways.

One, it immediately put the R1T out of my price range, and the downgrades offered added to the extended timeline made it less compelling as a vehicle.

Two, it really soured my opinion of Rivian. I understand they had the right to adjust prices on pre-order holders, but I felt like the passionate early adopters like me might be treated well on pricing considering all the delays we've stuck through, and all the word of mouth advertising they have goty from us.

RJ did a good job owning the mistake and making it right. It restored about 80% of my confidence in the company. I do like the thought that I'm getting a $90k vehicle for $70k, but I'm not banking on that doing anything other than being a buffer against depreciation. There will always be a few wealthy people willing and able to shell out $90k for a bad ass truck, so while future order volume might decrease, I don't think that's too much of an issue at the moment. As Rivian realizes economies of scale, bring battery production in house, and future order prices go up, they will make back any marginal losses they incur from us early adopters.

I plan to cautiously go back to being a brand ambassador. Glad I held my stock.

Sponsored