Citing "inflationary pressure, increasing component costs, and unprecedented supply chain shortages and delays for parts," Rivian just increased the price of its top R1T electric pickup and R1S SUV models by about 20%. Rivian's flagship Adventure edition of the quad-motor R1T electric pickup version now goes all the way to the eye-watering US$85,000, while its lesser Explore edition sibling starts from US$79,500. Just a day back, the base Rivian R1T price was US$67,500, so this is a hefty US$12,000 bump across the board, and that's without the destinations charges or additional options and features that can bring the price to more than US$94,000 now.
As if to compensate for that drastic price increase that angered many of those who preordered, Rivian went to upselling tactics, and introduced two cheaper EV models with smaller batteries. The dual-motor AWD R1T electric pickup will start from the original US$67,500 price, while the dual-motor R1S SUV from the previous base US$72,500 tag. The catch is that those will come with smaller battery packs good for 260 miles on a charge. If you want the original 310-mile batteries, you'd have to splurge extra at US$73,500 for the R1T and US$78,500 for the R1S. The other catch? The cheaper Rivian trucks are not scheduled for delivery before 2024, at a release date yet to be confirmed.
Needless to say, those who preordered and made Rivian's market cap fly higher than that of many legacy carmakers at last year's IPO, are livid. A number of them started posting their preorder cancellations, since, as one of the early adopters eloquently puts it, "I'm not paying 94k+ for a "mid-size" truck."
I wanted to go to electric over ICE but with that price I could buy the most decked out brand new F-150, GMC or Tundra and save 30k. If price increase was inline with inflation at 7-8% I would have ate the price change and understood. Not over 17%. Selling my stocks too.
Also needless to say, Tesla's CEO Elon Musk couldn't help but gloat over what he thought was an inevitable Rivian truck price increase:
Our primary challenge is affordability. Creating an expensive truck is relatively easy. If it is extremely hard to do so for Tesla, despite our much greater economies of scale & better technology, then it is damn near impossible for others.
Elon Musk also added that Rivian's "negative gross margin will be staggering," and it remains to be seen how many people will be cancelling their R1T and R1S preorders, or what effect would that have on Rivian's stock price that already tanked more than 8% upon their price increase announcement. Granted, Tesla's gross margin was negative for a long time before it went into the red, yet it had the first mover advantage then, while now Rivian will be facing stiff electric truck competition from everyone - from legacy carmakers like Ford, to Tesla itself with its upcoming Cybertruck.
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I had a reservation for just under $80K. Now it's $95K. I'm out. I'm giving up on getting an EV for several more years. My next truck will be another ICE powered one.
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