After backlash and canceled orders, Rivian backtracks and won't raise prices for existing customers
After facing a strong backlash and a slew of canceled orders, the electric automaker Rivian on Thursday reversed course and told existing customers that prices would not be increasing after all.
Rivian, which makes its EVs in Normal, announced the price increases on Tuesday. The young company cited “inflationary pressure, increasing component costs, and unprecedented supply chain shortages.”
But after two days of backlash, Rivian founder and CEO RJ Scaringe sent a letter to customers on Thursday apologizing for the move and reversing it.
“In speaking with many of you over the last two days, I fully realize and acknowledge how upset many of you felt,” Scaringe wrote. “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.”
Scaringe also shared the key information that many customers hoped to hear: “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.”
Scaringe acknowledged that making mistakes is 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,” Scaringe said.
Scaringe’s letter will be welcome by many Rivian customers. Several of them told WGLT on Wednesday that they canceled their order or planned to, calling it a “bait and switch.”
Presumably, future orders from future customers will come with the higher prices. The original prices, after all, were set in 2018.
"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," Scaringe wrote.
Bloomington-Normal’s economic future is now tied, in part, to Rivian. Rivian, now a publicly traded company with backing from Amazon, has rapidly become McLean County’s third-largest employer, with 4,600 workers in Normal. The launch of production has not been easy. Rivian is up against global supply chain challenges and its own ambition of launching three vehicles simultaneously. It missed its own modest production target in 2021 and shut down the plant for 10 days in early January to adjust its production lines. COVID’s omicron peak also disrupted production.
More details about Rivian’s production progress are expected to be released during the company’s quarterly financial results call next week.