Rivian Automotive Inc took back price rises on electric vehicles ordered before March 1, days after receiving negative feedback from consumers following a 20% price spike.
Preorder prices will revert to the former pricing on March 1, and consumers who cancelled purchases can have them reinstated, according to Chief Executive RJ Scaringe in a letter to clients.
In early trade, shares of the Irvine, California-based corporation were down more than 6%.
Due to inflationary pressures and greater component costs, the Amazon-backed business boosted selling prices of its vehicles by nearly 20% on Tuesday.
Scaringe claims that the cost of components and materials used in vehicle construction has increased significantly, citing everything from semiconductors to sheet metal to seats as examples.
According to him, the average price of a new automobile in the United States has increased by more than 30 per cent since 2018.
"As we worked to update pricing to reflect these cost increases, we wrongly decided to make these changes apply to all future deliveries," he wrote. "We need to plan production costs not only for today, but also for the future," he added.
Rivian's "negative gross margin will be staggering" and it is "near impossible" for other companies to make affordable electric pickup trucks, according to Elon Musk, CEO of rival Tesla Inc., who tweeted that Rivian's "negative gross margin will be staggering" and it is "near impossible" for other firms to make affordable electric pickup trucks.
The basic price of the Rivian R1T electric truck would have climbed to almost $79,500 from $67,500 under the prior proposal, while the R1S SUV would have risen to $84,500 from $70,000.
Scaringe claimed that the price hikes "damaged the trust" that the firm had worked so hard to establish with customers. Many people turned to social media earlier this week to express their displeasure with the price rise, calling it "betrayal" to Rivian's early backers.
"I'm back on with Rivian. Super sincere apology from RJ and they are making it all good," Zach Jump-Start Marino, a Rivian customer who had previously canceled his reservation after a $15,000 price increase, said on his Facebook page.
(Source:www.autonews.com)
Preorder prices will revert to the former pricing on March 1, and consumers who cancelled purchases can have them reinstated, according to Chief Executive RJ Scaringe in a letter to clients.
In early trade, shares of the Irvine, California-based corporation were down more than 6%.
Due to inflationary pressures and greater component costs, the Amazon-backed business boosted selling prices of its vehicles by nearly 20% on Tuesday.
Scaringe claims that the cost of components and materials used in vehicle construction has increased significantly, citing everything from semiconductors to sheet metal to seats as examples.
According to him, the average price of a new automobile in the United States has increased by more than 30 per cent since 2018.
"As we worked to update pricing to reflect these cost increases, we wrongly decided to make these changes apply to all future deliveries," he wrote. "We need to plan production costs not only for today, but also for the future," he added.
Rivian's "negative gross margin will be staggering" and it is "near impossible" for other companies to make affordable electric pickup trucks, according to Elon Musk, CEO of rival Tesla Inc., who tweeted that Rivian's "negative gross margin will be staggering" and it is "near impossible" for other firms to make affordable electric pickup trucks.
The basic price of the Rivian R1T electric truck would have climbed to almost $79,500 from $67,500 under the prior proposal, while the R1S SUV would have risen to $84,500 from $70,000.
Scaringe claimed that the price hikes "damaged the trust" that the firm had worked so hard to establish with customers. Many people turned to social media earlier this week to express their displeasure with the price rise, calling it "betrayal" to Rivian's early backers.
"I'm back on with Rivian. Super sincere apology from RJ and they are making it all good," Zach Jump-Start Marino, a Rivian customer who had previously canceled his reservation after a $15,000 price increase, said on his Facebook page.
(Source:www.autonews.com)
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