Chances for discounted pricing?

[Riviot]

You could spin up your own LLC and lease it to yourself.

But that LLC would need at least $7500 in tax liability, no?

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[DaveA]

Seeking Alpha seems to think they will be announcing the end of the exclusive portion of the Amazon between now and first half of 2024. That could be a positive, especially if they already have vendors lined up for the vans.

Yep, pushing out more vans is what will bridge the gap financially till R2. Once R1 backlog is fulfilled (and already is with R1T) its gonna get dicey.

 

[SANZC02]

Yep, pushing out more vans is what will bridge the gap financially till R2. Once R1 backlog is fulfilled (and already is with R1T) its gonna get dicey.

I do not think they have fully depleted the R1T backlog, they have in delivery locations but believe there still to be some in the places with no service centers.

Curious if they are going to widen the delivery radius for those fringe locations at the risk of larger servicing challenges.

 

[Prime]

All but zero, IMO. Tesla has since increased prices from the bottom.

Rivian’s near term demand generators:
- Dual motor option
- Leasing options with instant $7500 off
- And if they get really needy, I think they’ll provide cheaper financing rates via Chase than lower the price on cars. Messaging is very different

Agree, lease, once available, will be the easiest way to a sizable discount. Otherwise I don’t see any cuts in price in the next two years. By end of next year they should hopefully be near profitability and maybe we will see some lower trims, additional options that will adjust pricing further especially if R2 is taking longer than expected.

 

[dleepnw]

very low chance. they are losing money on each R1 they produce still, though that number is getting better. what they need to do is get the Georgia plant built as quickly as possible because the R2 is going to be their path to profitability and not worry about lowering the price of the R1.

 

[Epicloop]

With everything happening in the EV market right now, what are the chances that Rivian is going to follow suit on Tesla, Lucid et cetera and lower its entry level prices for the R1T and R1S over the next few months?

I highly doubt that will happen since demand still outstrips supply & the reasons others have mentioned.
There are still thousands of potential customers who have never even heard of Rivian or those that don't have a SC nearby.

I do not think they have fully depleted the R1T backlog, they have in delivery locations but believe there still to be some in the places with no service centers.

Only one Province and most States still don't have service centres so the demand will be there for some time as they build out SC locations.
I still have people asking me what brand a Rivian is when you give someone a ride they are blown away.

 

[Epicloop]

I think there are people who can live with the 270 mile range

There should be plenty as that is essentially the range of the QM in AP

 

[tiltedandsaltyaf]

i think the market has changed dramatically, if you look at the new R1S delivery posts, many people are getting theirs a lot sooner than anticipated; I can't think of other reasons why people getting pulled forward in line other than many people backing out of the purchases. Price drops are likely going to have to happen to move inventory in 2024, or a lower trim/battery/config be made available. standard pack, dual/single motor options

 

[Whatever_this_is]

We know so far that demand is exceeding supply for pre-price increase, but we have yet to move significantly into post price increase orders, and understanding what the conversion rates there are. My guess is that a lot of people will be cancelling their orders when it’s their turn as other 3 row EV SUVs have been significantly discounted as of late (X, EQS) and new entrants are starting to ramp up, not to mention the economy and financing rates. They will need to start pulling demand levers as they deplete the pre price increase orders. Personally I would not buy unless we see rather significant discounts from here.

 

[jambaman84]

I don't price decreases for the R1S.. that vehicle is very much in demand at its current price. I could see the T getting a little bit lower, because of the slower demand.

What I would do is starting 2024, the tax credit becomes a point of purchase rebate. I don't think Rivian qualifies for the full 7500, but instead will get half of that, so 3750.

So essentially, if you go standard for the T, that price drops it down to 69000.
If Rivian is smart, they can introduce that deduction at the very beginning, so you have a little bit more space to configure your vehicle before hitting the 80K cap.

 

[SurfnBike]

Tesla, in order to maintain their production targets of 1.8M for 2023, has been dropping prices due to high interest rates dragging down demand for large purchases. They fired the first shot of the EV price wars in January of this year. Their margins were halved, even after stating in their last conference call that they dropped the cost of production by $2k per vehicle. Tesla is very effective at cutting costs, where as Rivian's ability to do so has yet to be proven.

As an owner of vehicles from both companies I was hoping that these manufacturers would keep prices high, but in this environment they simply can't have both high production and high prices. It's not 2022 anymore!

Long story short I think that once Rivian works through their backlog they may have to look at demand levers. The good thing is that the tax credit caps forced them to advance their dual motor variant and offer a cheaper product earlier this year, so they are well positioned. That also bodes well for us R1 owners, because Rivian can maintain demand with a shift in product distribution, rather than simply dropping the price of the quad motor by 15-20% like Tesla.

 

[RivianPioneer]

All but zero, IMO. Tesla has since increased prices from the bottom.

Rivian’s near term demand generators:
- Dual motor option
- Leasing options with instant $7500 off
- And if they get really needy, I think they’ll provide cheaper financing rates via Chase than lower the price on cars. Messaging is very different

I agree. In their niche they’re as competitively priced they can afford to be while losing tens of thousands of dollars on each vehicle they churn out.

 

[carsly]

High interest rates, plus I'd offer the continued reduction in accelerated depreciation as the TCJA phase-out continues (was 100% through Dec 2022, 80% through Dec 2023 and drops to 60% in Jan 2024), is killing the high end vehicle market, especially SUV's and trucks, all around. I'd expect this to continue and prices will continue to fall.

For Rivian this will probably be some combo of:
- subsidized leasing with a pass-through of the $7,500 commercial EV credit and perhaps some interest rate buy-down/subsidy to keep headline prices higher
- standard pack gets released - guessing this could/would be a software-locked Large pack that someone can unlock later for a fee
- shift to more dual-motor with lower price points (and build costs) - this is already happening
- maybe introduction of a single-motor variant in late-2024, just a guess, to help keep pushing prices down until R2 is out
- actual price cuts - I think this will happen, in 2024 - Q2 or Q3 - but it will be the last step so as not to destroy lease residuals and resale values across the R1 market

Other thing that will happen is the mid-cycle refresh for the R1 platform due at the end of summer/early fall 2024. If timelines slip this becomes a 2025 model year vehicle presumably with lower parts costs and maybe a lower entry price due to some de-contenting with a lower trim level. I'm thinking coil suspension, no camp speaker, no flashlight, drop interior ambient lights, drop fog lights, cooled front seats, etc. and drop the MSRP by $5K. No rush to do it now, but as the backlog gets exhausted - and that pace is accelerating - they will need to take some or all of these steps to keep production growing. Delicate line to walk.

 

[Epicloop]

standard pack gets released - guessing this could/would be a software-locked Large pack that someone can unlock later for a fee

I can't see them giving away 30kwh of cells for a possible future sale.

If timelines slip this becomes a 2025 model year vehicle presumably with lower parts costs and maybe a lower entry price due to some de-contenting with a lower trim level. I'm thinking coil suspension, no camp speaker, no flashlight, drop interior ambient lights, drop fog lights, cooled front seats, etc. and drop the MSRP by $5K.

Re-introduce the Explore package similar to what you mentioned, they can delete the moonroof & power hatches as well.
Still wish I could go back to the Explore Max, watch it will be reintroduced 1-2 months after I take delivery.

 

[SoCal Rob]

There are still thousands of potential customers who have never even heard of Rivian or those don't have a SC nearby.

Only one Province and most States still don't have service centres so the demand will be there for some time as they build out SC locations.
I still have people asking me what brand a Rivian is when you give someone a ride they are blown away.

I saw this issue in Palm Springs this past weekend. Friends from the suburbs of Philadelphia, Pennsylvania were visiting and got to see a Rivian up close for the first time. They have a PHEV Range Rover Sport plus a Polestar and they really liked the R1S, but wouldn’t consider buying because the closest Service Centers are hours away. I let them know that there should be a Trenton location coming soon which is about 20 minutes from them. They thought that sounded good but wondered why there’s nothing planned in Pennsylvania so I explained that PA forbids direct sales and service and Rivian is working around that limitation.

I suspect that there are a lot of people who are more rational than we are as early adopters. Rivian continuing to get vehicles on the road for them to see and service locations for them to use will get more of those folks to consider a Rivian.

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