The electric automaker Rivian is facing strong backlash from pre-order customers after announcing price increases this week. Some customers have canceled their orders.
Rivian notified customers Tuesday that “vehicle base pricing and the cost of certain options, upgrades, and accessories” have increased, effective immediately. The company cited “inflationary pressure, increasing component costs, and unprecedented supply chain shortages.”
Several customers told WGLT the price of their vehicle (as currently configured) jumped around $15,000. Those customers say it feels like a bait-and-switch that raises deeper concerns about the way that young company is managed.
“It’s a damn shame,” said Tyler Lisenby of Lake Forest, who canceled his R1S (sport utility vehicle) pre-order Tuesday. “In a situation like this, where a company makes such a drastic shift in direction, to me that speaks to bigger issues – like lack of preparedness.”
Lisenby placed his R1S preorder about six months ago. The Peoria native has a friend who works at the plant. He liked that it was made in central Illinois. He liked how it looked too — a worthy successor to his family’s trusty Honda CRV that could handle cross-country road trips.
“It felt good to do it, because it’s made in Normal,” Lisenby told WGLT. “It was the first time I’ve ever purchased a car and felt like I was doing something right.”
But Tuesday’s price change caused him to cancel his order. His R1S was going to jump in price from $75,000 to around $90,000.
“This was certainly going to be the most I’ve ever spent on a vehicle, ever in my life. But part of that opportunity-cost there was that it was a locally built product,” Lisenby said.
Rivian’s all-electric truck and SUV weren’t cheap to begin with — the cheapest version started at $67,500 — although that’s not uncommon for higher-end trucks and SUVs.
Those original prices were set in 2018, when Rivian debuted at the LA Auto Show. A lot has changed since then.
In a statement, here’s how Jiten Behl, Rivian’s chief growth officer, explained the price increases:
“Like most manufacturers, Rivian is being confronted with inflationary pressure, increasing component costs, and unprecedented supply chain shortages and delays for parts (including semiconductor chips).
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. This decision will allow us to continue to offer competitive products that maintain the high standard of quality, performance and capabilities that our customers expect and deserve from Rivian.
Along with the adjusted prices for our current offerings, we are also announcing Dual-Motor AWD and Standard battery pack options for R1T and R1S, which will provide a broader range of choices for customers as part of our expanding portfolio of options, upgrades and accessories.”
(A Rivian spokesperson did not answer WGLT’s questions about whether the company was concerned with the number of cancellations it’s seen since Tuesday.)
Rivian’s explanation isn’t enough for customer Marc Zimet.
Zimet, who lives in the Los Angeles area, said he likes trucks and he likes new cars. So he pre-ordered the Rivian R1T truck in mid-2020.
“Yesterday I learned that the Adventure (package) I was forced to upgrade to (earlier this year), if I want to even keep the price similar, I would need to demote the car from a four-motor vehicle to a two-motor vehicle; I no longer get the Tonneau cover at all unless it’s $3,000; I have to pay $2,500 to keep the paint color of black; and in order to keep the 300-mile range battery, I have to pay $6,000 or something. Otherwise, I’m relegated to a 230-mile range battery,” Zimet said.
He’s been waiting almost two years, and he’s OK with waiting. But changing the price of the vehicle – or offering him a lesser vehicle for the same price – is “not ethical,” he told WGLT.
“I have lost faith in the company now,” Zimet said. “I recognize that Rivian is a new company, but the reality is, it tells me more about the company – that it’s not being run well. Now I’m aware that the company doesn’t make good business decisions.”
Rivian has rapidly become McLean County’s third-largest employer, with 4,600 workers in Normal. But 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.
Zimet, the LA buyer, hasn’t canceled his preorder yet. He’s going to wait to see how it shakes out. If Rivian reverses itself quickly, he may give them a chance.
“It’s a little frustrating, but at the end of the day, it’s just a car,” Zimet said.
Kris Williams of Bloomington is one of the lucky ones.
Williams, one of the earliest pre-order customers, signed her contract for her R1T last week. She’s expecting to get it by mid-April. For customers like her, there is no price increase.
“Since you are in the final steps of completing your transaction, your Rivian preorder will not be affected by these adjustments,” Rivian told customers like Williams.
Williams, who lives just a few miles away from Rivian’s manufacturing plant, has enjoyed her experience as a Rivian customer. She once got to ride in a Rivian with founder and CEO RJ Scaringe. She even appeared in a Rivian promotional video.
“I was just so happy that I get to get mine for the same price,” Williams said. “I feel really bad for the people that weren’t locked in, weren’t that close to getting their vehicle. The price? I’m sure their eyeballs popped out of their head. I would be pretty insane too.”
