Rivian raises EV prices by 20%, inviting customer anger and Musk taunts

A Rivian R1T pickup truck is parked outside the Nasdaq Market site in Times Square in New York, U.S., November 10, 2021. REUTERS/Brendan McDermid

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SAN FRANCISCO, March 1 (Reuters) – U.S. electric vehicle start-up Rivian Automotive Inc (RIVN.O) said on Tuesday it had raised selling prices for its vehicles by about 20% due to inflationary pressures and the rising component costs, angering some customers.

The price increase also drew caustic comments from Elon Musk, chief executive of rival Tesla Inc , who tweeted that Rivian’s “negative gross margin will be staggering” and that it is “almost impossible” for other companies to make an affordable electric pickup. trucks.

Rivian, in which Amazon.com Inc has a 20% stake, said the starting price of its R1T electric pickup trucks rose about 17% and its R1S sport utility vehicles about 20%. He said the price increases would affect most customers who have already placed pre-orders for the vehicles.

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“Well, it’s a sad day for me. I canceled Rivian’s order. So disappointed,” said “Zach Jump-Start Marino,” who said he lives in Georgia and owns Rivian stock, on its publication on Facebook.

“The price increase was astronomical and unfair to pre-order holders and early supporters. I’m not paying 94,000+ for a ‘midsize’ truck,” he said, adding that he could buy gasoline-powered pickups such as Ford Motor (FN) F-150 at much lower prices.

He told Reuters his R1T price rose by $15,000 including options.

Tesla Inc (TSLA.O) and traditional automakers have also raised vehicle prices in the United States to offset high costs related to logistics and supply chain disruptions, and dealers often mark up prices in due to vehicle shortages.

“Like most manufacturers, Rivian is facing inflationary pressure, rising component costs, and unprecedented supply chain shortages and delays for parts (including semiconductor chips) “said Jiten Behl, Chief Growth Officer of Rivian, in a statement.

The California-based startup fell short of its production goal last year due to supply chain constraints.

Rivian said the cost of some options, including paint and wheels and upgrades such as the reinforced underbody shield, have also increased.

The base price of the Rivian R1T drops from around $79,500 to $67,500, while the R1S starts at $84,500, down from $70,000.

AFFORDABLE

Rivian said it will introduce an R1T model with a lower-range battery and dual motors in 2024, priced at $67,500 from scratch.

Rivian’s former sales and marketing executive, Laura Schwab, said in a lawsuit against the company in November for “gender discrimination and retaliation” that Rivian recognized the need to raise vehicle prices “after IPO”.

“The vehicles were undervalued and each sale would result in a loss to the business,” she said in the lawsuit. Rivian, which went public in November, declined to comment on the lawsuit.

Musk, who tweeted his comments Tuesday night in response to a story about Rivian’s price hike, was asked about the price of Tesla’s next electric pickup truck, the Cybertruck.

“Our main challenge is affordability. Creating an expensive truck is relatively easy. If it’s extremely difficult for Tesla to do that, despite our much greater economies of scale and better technology, then it’s nearly impossible for Tesla. others, he said.

Musk said in January that Tesla was delaying the launch of the Cybertruck until next year, prioritizing production of its existing models due to parts constraints.

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Reporting by Hyunjoo Jin; Editing by Muralikumar Anantharaman

Our standards: The Thomson Reuters Trust Principles.

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