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

[Gator42]

Count me as one more who didn't react yesterday but was out the door in spirit. A 3+ year ressie holder it was hard to watch as the thank you was a post card instead of some swag, then T comes before S, test drives by location (not mine), then deliveries to employees, then by location (not mine), then the IPO 'reward', then the price hike. Nothing was ever promised but it still feels arrogant and wrong. I'm glad they reversed and today I give thanks to those who vetoed early...

I'm still not sure if I'll commit with my order coming up in a few weeks, but considering the new vehicle environment out there I'm leaning toward giving it a shot

Sponsored

 

[TollKeeper]

My chat with CS

Me: So I realize you have likely answered this question a hundred times today but... When are we expecting to see the prices corrected on our configs?

CS: To be honest, we just had a meeting earlier today. They're working on redoing the Account Page so that members like yourself that preordered before the price changes will have the previous pricing reflected in your account

We'll communicate with you the moment we have a more definitive date

Rest assured, your pricing will revert back to the original pricing you saw before we made the changes

So its still going to be fixed.. Eventually

Then we chatted a bit more...

Me: I was so ready to cancel when I saw the price increase.. I am stretching my budget to afford it, and the price increase pushed it out of my limits. And then my $100k in IPO stocks took a HUGE hit yesterday.

CS: I absolutely understand, it made me rethink my preorder as well. Rest assured we have a lot to announce regarding expanding our vehicle portfolio and there's more exciting things to come

 

[Bristlecone]

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​

On my configuration site the revised price ($85k instead of $72k) price is still listed. I assume that will be re-revised to my original price and configuration?

 

[LaunchGreen]

On my configuration site the revised price ($85k instead of $72k) price is still listed. I assume that will be re-revised to my original price and configuration?

The change is going to require code changes and they probably don't have the configurator built to handle multiple pricing sets for the same product. This is going to take time - be patient. I'm going to guess a week to let people reverse their cancels and change the price on account page and 2-3 more weeks before the configurator works with the "prior" pricing.

 

[TollKeeper]

The change is going to require code changes and they probably don't have the configurator built to handle multiple pricing sets for the same product. This is going to take time - be patient.

Read my post above..

 

[Zoidz]

My configuration price has NOT reverted back.
Instead of refreshing every 15 minutes, I am going to wait until tonight before checking again.

Did you read the email? It will be a few DAYS, not seconds, minutes or hours.

 

[pwilson662]

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​

RJ is a standup guy! This action goes a long way to restore my trust in the company. I don't know about others, but the earlier news sent me into a depression. Now I am happy! Rivian and other EV manufacturers need to consider the effect of the new price points on their vehicles. TCO would have been much cheaper by switching plans back to a competitor's truck with an internal combustion engine. I want to help the environment and all, but not at the expense of putting me in the poor house. Thank you RJ, and I suppose your Board.

 

[zefram47]

Boy I hope that's real.

 

[mini2nut]

I wouldn't be surprised to see Rivian mail out some free swag to reservation holders to help regain their trust and apologize for their "not thought through" price increase mistake.

 

[SANZC02]

Everyone seems to be taking the price rollback in stride here… yesterday I would have thought I had a better chance of having my R1S in my driveway this morning than getting that email from RJ.

This could not have been part of a contingency plan, it is incredible to me to think that a decision like that could be made so quickly. Would love to have been a fly on the wall in those meetings.

 

[LaunchGreen]

I wouldn't be surprised to see Rivian mail out some free swag to reservation holders to help regain their trust and apologize for their "not thought through" price increase mistake.

Not required in my opinion - they have already over compensated.

 

[mini2nut]

My prediction? Look for some unannounced Rivian SWAG in your mailbox soon.

 

[LeoH]

Not required in my opinion - they have already over compensated.

I think they compensated properly, but not over compensated. However, i do not think they need to over over compensate, they have some shareholders to please after the dip in stocks.

 

[iansriv]

I don't know about others, but the earlier news sent me into a depression. Now I am happy!

I hear you-I felt bad too. But, think about all the complaints before the price change. We had the same thing we have now but are all happy. Funny how life works.

 

[Tomgriff]

RJ is a standup guy! This action goes a long way to restore my trust in the company. I don't know about others, but the earlier news sent me into a depression. Now I am happy! Rivian and other EV manufacturers need to consider the effect of the new price points on their vehicles. TCO would have been much cheaper by switching plans back to a competitor's truck with an internal combustion engine. I want to help the environment and all, but not at the expense of putting me in the poor house. Thank you RJ, and I suppose your Board.

I don't know if he is a stand up guy or not. He very well could be. He certainly comes across that way in the interviews I've seen and good people do make bad decisions once and awhile.

That being said, I've written and reviewed a lot of press releases in my life as well as spoken to the media, the email consists of talking points. That doesn't make it insincere but it doesn't make it sincere either.

Hard to get past the fact that prices were raised just as cars were starting to be delivered. If they needed to adjust prices, they should have been adjusting prices over the last few years, not in one big chunk at the end. It doesn't take an MIT trained engineer to figure that out.

I'm not convinced this decision was made by altruism, it was made because they got way more cancellations than they expected when they made this decision and their stock took a much larger hit than anticipated.

I think they also got into group think, fell in love with their product and lost objectivity. It is really hard to be objective about your "baby" which probably led them to misread the price sensitivity.

I will likely stick with my order, but this has made me think if I really want to spend $80K on a new vehicle. I can buy any number of outstanding ICE vehicles for less than $40K. But I love EVs and their performance superiority so not sure I want to go back to ICE. Plus I hate changing oil and I'm too cheap to take to an oil change place or even worse pay a dealer to do it...

Sponsored