Why Rivian tried to charge customers an extra $20,000 for pre-orders

Electric vehicle (EV) maker Rivian reversed course on a price increase yesterday (March 3) that would have charged customers 20% more than the amount originally listed for their cars. Some Rivian customers canceled their orders after seeing that they would have to pay $10,000 to $20,000 more than expected.

In a letter to customers, Rivian CEO RJ Scaringe said the decision “broke the trust we have worked to build with you,” and that the original price will be honored on Rivian pre-orders made before March 1.

While Rivian’s blockbuster IPO briefly placed its market cap ahead of both Ford and GM in November, the EV maker’s stock has dropped by 50% since January as it battles the same supply-chain constraints affecting the rest of the automotive industry.

Rivian delivered fewer than 1,000 cars last year

The electric truck and SUV maker first began taking pre-orders for its cars in 2018, and soon after, gained financial support from major backers including Amazon, which is waiting on an order of 100,000 Rivian electric delivery vans.

But Rivian had delivered just 42 cars to customers when it filed for an IPO in October and fell nearly 200 vehicles short of its production target last year, citing supply chain constraints at its new Normal, Illinois factory. The car maker delivered 920 vehicles in total last year.

Customers satisfied with Rivian’s decision to walk back its price increase may still have to wait another year to get their cars. In December, the EV maker said they won’t be able to deliver pre-orders to some customers until 2023.

The costs of auto production have risen

As is the case for nearly all automakers, it’s more expensive for Rivian to produce cars today than it was prior to the covid-19 pandemic. “Since originally setting our pricing structure, and most especially in recent months, a lot has changed,” Scaringe said, with the cost of everything from semiconductors to sheet metal to seats going up.

The average price of a new car is 23% higher than it was when Rivian first started taking pre-orders, according to Kelley Blue Book data.

At least one of Rivian’s major rivals took note of the price increase this week, as Tesla’s Elon Musk speculated about its potential effect in a Twitter reply.

Note: This article have been indexed to our site. We do not claim legitimacy, ownership or copyright of any of the content above. To see the article at original source Click Here

Related Posts

Derivatives January 11, 2022: Return to the range of 1,470-1,490 points

Chứng khoán phái sinh Ngày 11/01/2022: Trở về vùng 1,470-1,490 điểm Các hợp đồng tương lai đồng loạt giảm điểm trong phiên giao dịch ngày 10/01/2022. Basis hợp đồng VN30F2201 đảo chiều và đạt giá trị -1.6 điểm. Điều này cho thấy nhà đầu tư đã bi quan trở lại về triển vọng của VN30-Index.…
Read More
Bam adopts AI for risk management thumbnail

Bam adopts AI for risk management

Bam is the launch partner for nPlan Portfolio, making it the first contractor anywhere in the world to use nPlan’s AI and big data to quantify and manage schedule risk across a portfolio of projects. Bam will use the tech to oversee an initial portfolio of 50 projects and work nPlan to refine the product
Read More
How to Strengthen Your Curiosity Muscle thumbnail

How to Strengthen Your Curiosity Muscle

Five science-based recommendations. November 03, 2023 Thomas Jackson/Getty Images Tweet Post Share Annotate Save Get PDF Buy Copies Print Building our curiosity muscle is essential because it will aid in the efficiency of leadership, enables continual learning, and because it’s a sought after skill by employers. Like any muscle, to strengthen it, you must activate
Read More
Eminem joins Bored Ape Yacht Club with $450,000 NFT purchase thumbnail

Eminem joins Bored Ape Yacht Club with $450,000 NFT purchase

Ethereum › U.S. › NFTsThe Real Slim Shady has kicked off his apish NFT collection in style. Liam Frost · January 3, 2022 at 6:30 pm UTC · 2 min read Popular rapper Marshall Mathers, better known as Eminem, has joined the ranks of non-fungible token (NFT) enthusiasts as he bought Bored Ape Yacht Club…
Read More
Vacation days by law: how many do I have and when thumbnail

Vacation days by law: how many do I have and when

Ley Federal del Trabajo Los días de descanso obligatorio están determinados por la Ley Federal del Trabajo. Si los trabajadores prestan sus servicios en estos días, el empleador deberá pagar un monto extra al que perciben los trabajadores por día.  A casi dos años de que inició la pandemia en México, la vida laboral ha sufrido…
Read More
Index Of News
Total
0
Share