Leadership

[mini2nut]

Until production increases and they start seeing some revenue I predict a hiring freeze at Rivian. There may also be some EE layoffs until Rivian's financial footing is more stable. Something has to give with this recent pricing reversal.

This pricing debacle must we weighing heavily on RJ. This will most likely prove to be the most stressful work week for RJ since he founded the company.

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[paariv]

Rivian's acts show a failure I see all too often - analysis limited to legal rights and dollars and cents, with no consideration of the human factor. I always counsel my businesses to be human and fair first, second, and third.

If they'd thought through how to fairly implement a retroactive increase that recognized order date - not whether your specific colors (or model - R1Ts only) were already in production - they could have gotten away with a price hike. If they'd thought through how differently the increases treated certain colors and options, it wouldn't have seemed so punitive. If they'd done so much more they could have kept lots of the increase in place.

But they didn't. And because of that, I think reversal was the only way out of this mess. And as a shareholder, even if you just look at cash on hand, this was a fine outcome. Keeping the price low helped the IPO, which was fantastically successful at getting capital to the company. Remember how the price went up many times before the bell rung? Well, now they can use that money to pay for this week's botched price increase and still be ahead. At least, I hope so.

But I wonder how drastically their order rate has dropped in the last 48 hours, and how long it'll take to recover. The used market is going to be cannibalizing their new sales for a hell of a long time.

 

[Surfnturf]

The decision to raise prices in the manner that they did was extremely bad. The decision to reverse course two days later and say everyone gets to purchase at the old price is frankly an even worse decision.

To anyone who is paying any attention at all, it's clear the price of everything has gone way up in the last few years. Now they are locked in to selling vehicles way below market levels for likely the next 3+ years. From a business standpoint, that is crazy and their stock will be punished for it.

Rivian needs to clean house at the management level because they are making ridiculous and avoidable errors left and right.

I completely agree with this take. From an external person observing a company that was valued at more than Ford before even shipping one car to an actual customer this company must look like a joke to everyone in the public and their competition. Everyone wants to forgive RJ immediately for his quick change of tune but that email on March 1 had to have is approval on it and maybe he is the problem. He is probably a great engineer and designer but has no idea how to manage, market, and most importantly produce. I believe there was more to Ford leaving the co operative agreement on building a vehicle together with Rivian. Ford probably saw how they were operating and said we are out. This company is trying run before it can even stand up and has forgotten about its most important part of its business which is us the customer. They put a billion dollars into this Forever plan to save the world and they haven't even shipped vehicles yet.... I actually feel sorry for RJ but like everyone said hopefully they will learn from their mistakes and make better business decisions.

As a December 2018 pre order holder I canceled my reservation yesterday and wrote their CS a pretty harsh email. Would be surprised if they reach back out to me.... will probably be last on their list! If they don't contact me I am out and if they do reach out I will hear what they have to say.

 

[moosehead]

Something this considerable may have occurred across multiple C-Suite and Board members collectively.

IMO it is still a definitive need for new heavyweight C-Suite addition(s). That may have been the case for this second stage post IPO execution era alone, but the missteps highlight the need for such.

 

[IPTV65]

RJ made it right for sure.... Hats off to him for manning up and doing the right things for his company and his customers. That took fortitude to walk this back. BTW…I never personally considered cancelling my order but I didn’t love how it all went down.


Now he needs to do a review the performance of his leadership team. You can’t be in a position where you are not aware of how people view their reservations and relationship your company after such a long-drawn-out release process. From the outside looking in it looks like the Marketing, Communications, and Sales leadership severely let him down and almost cost him a key element of his company. That being his preorder holders who took a leap of faith with him and what we bring to the table. These areas have been a systemic problem for Rivian in my humble opinion. The whole world sees the issue. If I'm RJ it’s not the kind of help I need at a time like this. My two cents.

Some examples from his letter:

1)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.
Fair enough and I totally agree and I hope that includes review of the competence of key personnel based upon performance in the now VERY RECENT past. I think some tough decisions need to be made regarding some key corporate functions. No one seemed shocked this got sideways on some level and that is, for me, a source of some of trust issues. I still don’t personally trust the 3 areas listed above to not make another Ill-begotten move.

2)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.
Rooking marketing mistake. By even just visiting places like this free forum (or many others) you can be lazy and still get a solid understanding of how folks feel about their pre-order. This one is too easily solved to be missed by an experienced team. Get out from behind your desk and pay attention folks. Did anyone do any market research at all? If the answer is yes even more embarrassing for them. Hint…the dual motor might be somewhat acceptable AND fit the price point BUT maybe the 2-year wait is a showstopper????

3)We also didn’t manage communications well. We didn’t give you enough insight into what was driving these decisions.
I believe, even according to an online pole on this site , poor communications has perpetually been the #`1 complaint of even their staunchest supporters. Totally a systemic issue that a competent Marketing leader would never allow to be corporate eye sore. Get out your keyboard, video camera or whatever and fix it. It’s so bad almost anything would help.

Okay I feel better now! ha ha

 

[hola29]

What is interesting is that Rivian got stuck when they announced pricing too early. The cars are clearly worth more than they are selling them for. So a lose lose for Rivian...

Lose A: All pre-order people are getting way more vehicle than they are paying for. They can turn around and sell it for more than post March 1st folks will pay retail, because of the wait...folks are getting a $20K asset for this mistake. Pretty silly, and nothing I have seen before.
Lose B: The entire back and forth was a PR headache...
Lose C: Money that could have been used to scale or expedite SW dev is lost in this debacle...

I guess pre-order folks getting a below market car for a $1K hold feel pretty good....

Good lesson, but they should have never announced pricing until they were ready to ship...

I like the leadership qualities displayed by RJ in fixing and owning the mistake.

This is the kind of characteristic that will make people even more inclined to follow him, work for him, and do their best work for the company.

Folks will be discussing how it could have been done better and rightly so -- but I like how they went about fixing things.

True leadership is fixing your mistakes, learning from them, and improving.

The way he did this gives me long term confidence in him and Rivian.

That's my $0.02 anyway (~$80k with inflation)

 

[Tomgriff]

Not sure I buy that RJ did this from altruism, they had no choice after how many orders they were losing and how the stock prices reacted. It seems hard to believe that RJ didn't sign off on the price increase in the first place. The person making the decision is the person responsible. Firing someone else seems a bit disingenuous unless they were deceptive and misled the decision maker. I've never bought into Rivian as more than a company and I still don't.

The real question is the allegation that they knew they were going to raise prices before the IPO true and does that constitute a violation of SEC (or other) laws or rules? It isn't my field so I don't know, but either this is a terribly run company or there was deceptiveness at some level.

 

[Arky]

Rivian's acts show a failure I see all too often - analysis limited to legal rights and dollars and cents, with no consideration of the human factor. I always counsel my businesses to be human and fair first, second, and third.

I'm surprised how much the 'contract verbage' gets accepted especially on forums like this - "too bad, they're not legally obligated to hold pricing!" Realistically in any transaction, if you have to pull the contracts out of the drawer, something already went wrong. They're just there in case they do.

Treat people with respect and be honest with them and most of them will return the favor, it makes for a much more cooperative relationship.

 

[hola29]

So Rivian, a brand new company, now eats a couple hundred million and their supporters cheer because they profited, likely $20K per vehicle, and got a car way below market value due to a mistaken pricing priorities...As they say, with customers like these...lol

I'm surprised how much the 'contract verbage' gets accepted especially on forums like this - "too bad, they're not legally obligated to hold pricing!" Realistically in any transaction, if you have to pull the contracts out of the drawer, something already went wrong. They're just there in case they do.

Treat people with respect and be honest with them and most of them will return the favor, it makes for a much more cooperative relationship.

 

[paariv]

I'm surprised how much the 'contract verbage' gets accepted especially on forums like this - "too bad, they're not legally obligated to hold pricing!" Realistically in any transaction, if you have to pull the contracts out of the drawer, something already went wrong. They're just there in case they do.

Treat people with respect and be honest with them and most of them will return the favor, it makes for a much more cooperative relationship.

I call this the “magic words” theory of law. The idea that you can draft a contract in such a precise bulletproof way that it’ll act like a get out of jail free card no matter how unreasonably you behave.

I mean, maybe a court will side with you on a super narrow question of law, but the reality of the world is that you can’t expect to treat people like shit with impunity and have there be no repercussions.

 

[ironpig]

I like the leadership qualities displayed by RJ in fixing and owning the mistake.

This is the kind of characteristic that will make people even more inclined to follow him, work for him, and do their best work for the company.

Folks will be discussing how it could have been done better and rightly so -- but I like how they went about fixing things.

True leadership is fixing your mistakes, learning from them, and improving.

The way he did this gives me long term confidence in him and Rivian.

That's my $0.02 anyway (~$80k with inflation)

I don't know. CEO characterizations are a real problem in this country. These decisions are not often made by one person. And I'm not knocking RJ by saying that, it's just the truth.

This price hike is WAY BIGGER than a consumer issue. They have a lawsuit in which Laura Schwab is on the record saying the trucks were underpriced and a conversation about raising prices after the IPO. The question has been for the last few weeks - Will they dare do it? Especially as it may open them up to further SEC scrutiny?

This whole thing is a disaster. Don't judge it by a folksy email from the CEO written by (or at least thoroughly vetted by) PR and lawyers. It's not a case of leadership. It's a PR Disaster cleanup and possibly an attempt to avoid the microscope of Federal Regulators.

Buy the car not the brand. Be careful not to become a Rivian cultist like the Tesla Fanboys did. It will only lead to heartache and poor decision making.

 

[GoWest!]

Here is my concern with all of this debacle!

Pricing was set in 2019 for something that was going to be shipped in 2021/22.
Inflation and Covid hit and prices for the parts needed went up 15-20%!!!

Tesla had the same issue with Cybertruck where they removed pricing from their website.
Lots of other OEM's increasing the prices as well.
So you would think the Management team would learn from this Right?

Wrong!
They are making the same mistake again!
For the Dual motor version they are setting the price for something they will not ship till 2024!!!
So by the time they ship, they will have considerably less margins and looking to hike again!

This? Don’t step in the poo again Rivian!

 

[stynes]

I don't care for the CRO, Jiten Behl, either. It appears that he is at the center of the two black eyes Rivian has experienced to date. First, the lawsuit brought on by the fired exec, Laura Schwab, that holds serious credentials in the automotive world including President of the Americas for Aston Martin. They don't just give that job to anyone. She has a favorable pedigree and many years of experience and my gut and brain are leading me to believe her story.

This brings me to the second, and latest debacle, the pricing flop. Again, Behl, was a key player in the decision to raise the prices. If you read both of their LinkedIn profiles and nothing else, it appears that he is inexperienced, and way under qualified for his role at this level. I'm guessing he probably felt threatened by Schwab. Also, in the court filings of the lawsuit Schwab states multiple times that Behl "brushed her off" and didn't want her communicating her (pricing concerns) with RJ. Granted, she was sounding the alarm because she had done the research to prove the R1's were indeed under priced. Why would he do that?

To be clear, these are my opinions and my opinions only but something doesn't smell quite right with this guy. I'm not a gambler, but I would bet a few bucks he isn't long for his current role. Somebody is going to have to take the fall for this H U G E price hike mess.

I thought the same thing looking at Behl's profile. He got that job with THAT resume? Not an indictment of his abilities - he may be phenomenal, but his resume looks very underwhelming given my understanding of his responsibilities.

 

[stynes]

I'm surprised how much the 'contract verbage' gets accepted especially on forums like this - "too bad, they're not legally obligated to hold pricing!" Realistically in any transaction, if you have to pull the contracts out of the drawer, something already went wrong. They're just there in case they do.

Treat people with respect and be honest with them and most of them will return the favor, it makes for a much more cooperative relationship.

Exact same observation I made on another thread a few weeks ago...
https://www.rivianforums.com/forum/threads/tick-tick-tick.3580/page-5#post-98490

 

[paariv]

Exact same observation I made on another thread a few weeks ago...
https://www.rivianforums.com/forum/threads/tick-tick-tick.3580/page-5#post-98490

Spot on. It’s particularly annoying when the disclaimer lovers act as if it’s naive to expect to be treated reasonably with respect, and savvy to expect the worst. You can demand respect and fairness as a baseline value while still recognizing that others will seek to maximize their own gains.

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