By Matt McFarland, CNN Business
Rivian is rolling back price hikes on preordered vehicles following backlash from its customers. Rivian CEO RJ Scaringe apologized to customers in a letter published Thursday.
“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,” Scaringe wrote. “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.”
Rivian had announced price increases on its pickup truck, the R1T, and its SUV, the R1S, on Tuesday. The quad-motor R1T base price increased from $67,500 to $79,500 and the quad-motor R1S base price increased from $70,000 to $84,500.
Customers can configure and reserve their R1T or R1S with a refundable $1,000 deposit. New preorders generally aren’t likely to receive their vehicles before 2023.
The automaker pointed to inflation, supply chain shortages and increasing component costs as the causes of the price increases.
“This rise in cost and complexity due to these challenging circumstances necessitate an increase to the prices of the R1T and R1S models we offer today — prices which were originally set in 2018,” Rivian chief growth officer Jiten Behl said in the statement announcing the original price increase at the time.
Many Rivian customers were irate and canceled their preorders. Some described the cost of their vehicles increasing as much as $20,000 due to the change.
Dallas area resident Brendon McCaulley, who had a pre-order for a R1T, said his price increased from $87,700 to $100,700.
McCaulley described Rivian’s first email about price hikes as being very “corporate speak” and a “tough pill to swallow.” He said he appreciated Scaringe’s apology, and the rolling back of the hikes for pre-order holders.
“The email this morning, that seemed more like the company I’ve been a fan of,” McCaulley said of receiving Scaringe’s letter. “I thought it was a real class move. He took ownership of it.”
Scaringe said in his letter Thursday that the company didn’t communicate well about the price hikes. Rivian will honor the original configured price for anyone who pre-ordered a vehicle as of the March 1 pricing announcement. Customers who canceled their pre-order after the price hike will be able to reinstate it, with the original pricing and delivery timing, he said.
Rivian has faced ups and downs since its initial public offering in November, which raised roughly $12 billion, the most cash since Facebook’s 2012 IPO. Rivian’s R1T was named the MotorTrend Truck of the Year in December.
Rivian at times was valued at more than Volkswagen, Ford and General Motors in 2021, but its stock has fallen 50% this year.
The automaker expected to fall short of its 1,200-vehicle production target last year. It’s also planning to build its second manufacturing plant this year outside Atlanta, Georgia. The factory should be capable of producing up to 400,000 vehicles a year.
Scaringe said in his letter that the most important thing Rivian is building is customer relationships.
“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,” he wrote. “It is how we grow.”
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