Rivian Reverses Price Bump for Pre-orders before March 1

[Crissa]

Maybe vehicles with a gross weight over 8500 should have a energy per load-mile. A rating that says its payload and energy consumption laden.

-Crissa

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[Sirfun]

Maybe vehicles with a gross weight over 8500 should have a energy per load-mile. A rating that says its payload and energy consumption laden.

-Crissa

That's more information than SOME manufacturers want to give.

 

[Tinker71]

I find the Rivian price adjustment swing really interesting and immature.

When Rivian and Tesla projected their release prices, they both projected inflation and they both projected future gains in manufacturing efficiency. In Tesla's case the 4680 and structural pack was already baked into the price. Rivian, a shared skateboard with the SUV.

When the CT was announced and Rivian reduced their pricing I am sure they analyzed prices and said. Yeah we can do this. Nobody priced in the pandemic and nobody should have tried. Sure many people thought it was inevitable, but like the 100 year flood, you don't budget that it will occur in the next 3 year budget look ahead. You insure around it with wiggle room in your pre order contract.

If the Rivian pre order deposit was $1,000 and the Tesla deposit was $100 I would have expected more price protection from demand price increases, but not necessarily from inflation price increases.

So if Rivian would have gone after 5-8% price increase justified by the pandemic, they might have gotten away with it. Instead they were greedy and went too high. Now they are back tracked get nothing, plus the loss of credibility.

Tesla did this a little with the very low volume Roadster, but learned their lesson for the most part.

I think Tesla is playing this perfectly, by pulling the prices and not talking about it. We know a premium Quad with 4WS is coming, it is going to be bad ass. People paying for the top tier are less price sensitive so expect to them to pay around the full price of the S Plaid. $130k. Their next model in the line up will need to top out around $80k less FSD. For people paying $130k, I hope they get an upgraded interior as well, maybe the solar tonneau.

That said I believe Tesla wants a huge chunk out of the light truck market in their overall quest to transform energy use and save the planet. In order to do this they need several options between $45-80K, with a median around $58k (excluding FSD) if they expect to make a dent in the overall market share including gas guzzlers.

Tesla is working their ass off and will pull every trick in the book to keep prices low enough to do this. I truly believe Elon is not just motivated by money. His wealth is just a means to an end. Expect no more than 10-15% price increase for most of us. Which will basically keep pace with the ICE offerings and still be compelling to switch for the masses.

*4860 to 4680.

 

[Mini2nut]

That's what happens when you announce MSRP's in 2018, years ahead of 2021 deliveries.

 

[charliemagpie]

In Rivian's defence, they were the first price point, and CT undercut them, so they lowered the price to match.

Conspiracy theory 101 :

I'm not condoning Rivian... DO they really have NFI ?

This is what has likely occurred :

1. Rivian Priced at ~$75,000 thinking ON PAPER that would be a competitive lower end price point, knowing a likely $5-$10,000 increase at delivery would be acceptable, especially cushioned with the excuses.

But having lowed to $70,000 to match the CT , they are now faced with close to $20,000 increase.

They lied early and got caught out when it was time to deliver.

 

[Ogre]

In Rivian's defence, they were the first price point, and CT undercut them, so they lowered the price to match.

Rivian should not have kept these prices through their initial launch.

They promised prices which were too low. They left them too low for a long time. They they promoted the hell out of the trucks letting people fall in love with their dream truck.

Then they raised the price so much that many people couldn’t afford the thing they’d fallen in love with. I’m betting many people who cancelled never bother to renew. Lots of people probably did a lot of soul searching to justify the initial purchase and when their dreams got flushed down the toilet, the little mea culpa isn’t going to reset that love.

This is exactly the sort of business destroying nonsense people suggest Tesla is going to do.

 

[charliemagpie]

Rivian should not have kept these prices through their initial launch.

They promised prices which were too low. They left them too low for a long time. They they promoted the hell out of the trucks letting people fall in love with their dream truck.

They they raised the price so much that many people couldn’t afford the thing they’d fallen in love with. I’m betting many people who cancel never bother to renew. Lots of people probably did a lot of soul searching to justify this purchase and when their dreams got flushed down the toilet, the little mea culpa isn’t going to reset that love.

This is exactly the sort of business destroying nonsense people suggest Tesla is going to do.

Exactly right

They baited the net with low price, that's cheating the customer.

People get upset, but they understand a mistake. You have a chance to win them back. But when they are offended, you have lost them forever.

 

[Ogre]

I wonder if Rivian is going to report the impact this craziness had on their pre orders during their next earnings call. They have a weird fiscal year which ended at the end of February and someone suggested they waited until the quarter ended to announce this so they could delay announcing the impact of their gaff.

I’m sure this will be an analyst question if they don’t address it head on.

 

[Mini2nut]

It will be interesting to see how Tesla handles the 2023 Cybertruck price increase. Everyone agrees the the 2019 reveal prices will be history by the time production starts in 2023.

 

[Ogre]

It will be interesting to see how Tesla handles the 2023 Cybertruck price increase. Everyone agrees the the 2019 reveal prices will be history by the time production starts in 2023.

This is not the case. Unless you are using some obscure definition of “Everyone” which does not include large numbers of people.

 

[charliemagpie]

It will be interesting to see how Tesla handles the 2023 Cybertruck price increase. Everyone agrees the the 2019 reveal prices will be history by the time production starts in 2023.

Maybe true, there might be a price increase.

But the general assumption is the price was based on the cost to produce at the time.

It is entirely possibly Elon projected and made allowance for likely cost increases.

 

[Mini2nut]

MSRP’s that were announced in late 2019 were pre-Covid, before supply chain issues, chip shortages, raw material price increases and inflation.

From a business perspective I simply don’t see how Tesla can stand firm on 2019 MSRP’s in 2023.

 

[Crissa]

MSRP’s that were announced in late 2019 were pre-Covid, before supply chain issues, chip shortages, raw material price increases and inflation.

From a business perspective I simply don’t see how Tesla can stand firm on 2019 MSRP’s in 2023.

Tesla increased their margin on cars by ten points last year - which means most of their price increase went straight to their bottom line.

So you can't see how they can make their promises? They've increased profits all without raising prices on any reservation or pre-order holder.

Somes to me like they got themselves some headroom there no one else seems to have.

-Crissa

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