Rivian avoids pre-orders from price hikes to fix ‘painful’ bug

March 3 (Reuters) – Rivian Automotive Co. (Rivno) He retracted price hikes for electric cars booked before March 1 after facing a backlash from customers after a 20% price increase.

CEO RJ Scaringe said in a letter to customers Thursday that pre-orders from March 1 will not be subject to the new rates, and customers who canceled orders can return them at the original price.

The Amazon-backed company on March 1 raised the base price of the Rivian R1T electric truck to about $79,500 from $67,500, while the R1S SUV went to $84,500 from $70,000. Read more

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The price hike prompted some customers to cancel orders and express their frustration, accusing the company of “betraying” its early backers, according to social media posts.

“It was a mistake and we broke your trust in Rivian,” Scaringi wrote.

“I’ve made a lot of mistakes since I started at Rivian over 12 years ago, but this one was the most painful.”

Rivian stock, which fell more than 13% on Wednesday, extended its losses on Thursday, down 4%.

The company’s logo appears on the Rivian R1T, the electric vehicle (EV) maker powered by Amazon, as it is parked outside the Nasdaq market site during the company’s IPO in Times Square in New York City, US, November 10, 2021. Photo: Brendan McDermid – Reuters .

The panic reiterated that the price increase was driven by inflationary pressures and rising component costs.

He said average prices for new cars across the United States have risen more than 30% since 2018 when it began taking pre-orders for RIT.

The move was welcomed by the owners of the reservation at Rivian.

“I’m back at Rivian. A very sincere apology from RJ and they make everything so good,” said Zack Jump Start Marino, who canceled his pre-order after the price increase.

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“100% confidence restored. This is the right move,” Zach Nelson, who made a reservation for the R1T in 2018, wrote in a tweet.

The new prices will remain valid for orders placed after the announcement.

“We believe the damage has been done and many customers will be buying electric vehicles from competitors instead,” said Garrett Nelson, an analyst with CFRA Research.

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Additional reporting by Akash Sriram in Bengaluru and Hyungu Jin in San Francisco; Editing: Sumiyadeb Chakrabarti, Shinjini Ganguly, Devika Syamnath and Cynthia Osterman

Our criteria: Thomson Reuters Trust Principles.

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