Engi_Nerd
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I posted back in December that Rivian's prices were too low to be legit, and we now know that's true. They were likely planning to sell them near cost back in 2018 to build up some volume, but no business plan could predict the dumpster fire that the last two years have been. The disfunction on display with this week's pricing circus however really has no precedent and to me, conveys several things:
1) Rivian's leadership is currently grossly inadequate.
2) There was plenty of time and many reasonable avenues by which to shift some of the inflation pressure to customers. A sliding scale that more heavily rewarded early adopters would have been an easy solution to show appreciation to their fans. I also imagine most would have taken $5K on the chin, without too much grief. What they instead chose defies all reason, alienating pretty much all customers before actually delivering any trucks (insert "well, actually they delivered 7 trucks").
3) Rivian almost certainly experienced enough preorder cancellations to endanger the company, mine included
4) With the magical reversal, we now know Rivian plans to lose tens of thousands of dollars on every one of the 75K+ R1 preorders, likely well north of a billion dollars.
5) Trapped between a rock and a hard place, no amount of billionaire backing can change the risk of Rivian going under has risen sharply
It's easy for us to look at the hike reversal and think, "Awesome, I could get a $90K truck for $75K". The problem is, we're not getting a truck. We're getting a software-defined vehicle that requires Rivian succeeds as a business in order to serve as reliable transportation for the owner. There really is no precedent for what would happen to owners if a company like Rivian went under. The cloud connected services the vehicle requires to function properly would be in question. Owners and third party shops would have pretty much zero ability to diagnose issues even if they could get parts themselves. Early owners will be betting big on a company that has all the pitfalls of a new car company AND a new tech company. I find it odd to not see more discussion about this. How many people here could afford to buy an $80K vehicle that gets orphaned in year 3?
1) Rivian's leadership is currently grossly inadequate.
2) There was plenty of time and many reasonable avenues by which to shift some of the inflation pressure to customers. A sliding scale that more heavily rewarded early adopters would have been an easy solution to show appreciation to their fans. I also imagine most would have taken $5K on the chin, without too much grief. What they instead chose defies all reason, alienating pretty much all customers before actually delivering any trucks (insert "well, actually they delivered 7 trucks").
3) Rivian almost certainly experienced enough preorder cancellations to endanger the company, mine included
4) With the magical reversal, we now know Rivian plans to lose tens of thousands of dollars on every one of the 75K+ R1 preorders, likely well north of a billion dollars.
5) Trapped between a rock and a hard place, no amount of billionaire backing can change the risk of Rivian going under has risen sharply
It's easy for us to look at the hike reversal and think, "Awesome, I could get a $90K truck for $75K". The problem is, we're not getting a truck. We're getting a software-defined vehicle that requires Rivian succeeds as a business in order to serve as reliable transportation for the owner. There really is no precedent for what would happen to owners if a company like Rivian went under. The cloud connected services the vehicle requires to function properly would be in question. Owners and third party shops would have pretty much zero ability to diagnose issues even if they could get parts themselves. Early owners will be betting big on a company that has all the pitfalls of a new car company AND a new tech company. I find it odd to not see more discussion about this. How many people here could afford to buy an $80K vehicle that gets orphaned in year 3?
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