Electric pickup truck manufacturer Rivian on March 3 pulled back a steep price increase from customers who had placed pre-orders after many of them contacted the company to complain about the increase.
In a letter sent out on press release newswires, Rivian CEO RJ Scaringe stated the company will honor the original price for anyone with a preorder as of the March 1 price increase announcement. The company also will restore the original price for anyone who canceled their preorder on or after March 1 and wants to reinstate it. Rivian will email customers with more details in coming days.
According to media reports, the base price of the Rivian R1T electric pickup would have risen to about $79,500 from $67,500, while the R1S SUV to $84,500 from $70,000. The 2022 Rivian R1T is the first mass-produced electric truck in the U.S., according to Motor Trend. The vehicle also has a 300-mile estimated range and can be switched to two-wheel drive.
In the letter, Scaringe cited the pressures of rising inflation that have spurred higher costs for the components and materials used to build Rivian models. "Earlier this week, we announced pricing increases that broke the trust we have worked to build with you," he wrote. "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."
After intense customer pushback, Rivian canceled the price increase. "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."
As the company figured how to update prices to reflect the cost increases, it "wrongly" decided to apply them 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.
Scaringe closed out his letter asking customers for their continuous feedback. For future pricing, he said the company plans to maintain lower starting prices on its vehicles while balancing those against more costly components.
"One of the things we talk about a lot internally is that we will make mistakes – it’s part of building something complex," Scaringe wrote. "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."