Rivian increases prices by up to $16,000

LOL! I got an e-mail yesterday saying, "just warning you, we're going to raise the price" on my deposited account. I knew it was probably going to be bad based on the pre-warning but this is next level.

I'm getting pretty **** frustrated with car buying and they can go f themselves. 20% inflated price when a large portion of the car prices are expected to come down at some point is a cash grab.

"Wow, so EVs blew up in the past year, supply and demand means we can charge more, screw the commitment we made to you" - What's actually being done/said between the lines.

Lack of honesty is the problem with all of the BS during this Covid market. Prices fluctuate, stuff happens, we get it, but when you ask us to put a reservation down then jack up the price, that's a bridge too far. When you do it beyond what is reasonable for the stated reason you're doing it, it becomes outright predatory and we just have to be like, "oh well, man is the man." We make financial and logistic decisions based on when we're going to buy cars. It's a 5 figure item not a coffee maker.

The entire industry's reservation system is built to lock in profits, perpetuate PR then jack up prices and manipulate committed buyers after the fact with no regard to your initial commitment. Then when you ***** about it on Reddit or something people try and tell you you're the problem. No, the problem is we're all built on "I accept" buttons that completely forego our reasonable rights as consumers and it's become "normal."

Some part of this needs to be a contract that they intend to actually fulfill. Every single reservation for a car in demand deteriating to some kind of BS has to demand action at some point.

MichBolt said:

I agree that these price increases are extraordinarily high. Having said that, I don't think the reservation system has zero value to the customer. It should create a priority list of who gets the vehicle first, and that has value when vehicles are selling out quickly. If someone is putting down a reservation on a new, unreleased vehicle model, they're really identifying themselves as early adopters; the value of the reservation is holding their place in line. It's different from putting down a reservation on an existing vehicle in production, like placing an order for current model Chevy Blazer or something like that.

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Every time I complain there's a chorus of little reasons and carve outs and they're all perfectly reasonable, the problem is when taken together as a whole, pretty much 100% of reservations for non-Tesla EVs have involved some level of missed consumer expectations that are completely within the manufacturer/dealership control for price and prioritization. My continued thought on this also addressed SGW.:

SGW said:

I think what you are referring to is a deposit. If the “reservation” is fully refundable, there is no skin in the game for the manufacturer OR the customer. Lots of folks on this forum tout having 3-4 reservations…they aren’t buying 3-4 cars. I would be disappointed, personally, but the problem is there is someone else willing to pay it, so they get the car. The only recourse for this, IMO, is for the market to say, “nah, I’ll pass” and I don’t see that happening.

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I can have 3-4 deposits on ordered cars that are fully refundable as well. The flexibility to do that comes down to the dealership networks in most cases and is ruled by their current level of demand for the car.

Tying both above thoughts together, Tesla is the problem. Tesla has actually somewhat reasonably been using the system to their advantage while trying to maintain customer satisfaction to the best of their ability. When Elon Musk promised a $35,000 Tesla he went through crazy lengths even after it was obvious he didn't have the manufacturing lines to follow through with the promise for a less-produced, budget model and those fiscal realities hit really hard. He even went so far as to offer those off-menu models they bespoke built and de-contented specifically to fulfill the promise.

That specific model 3 example and a few other Tesla pre-order examples where customers were a bit peeved but ultimately accepted the outcome because the original promises were unreasonable and great lengths were taken to attempt to fulfill the orginal promises.

The rest of the industry has noticed and literally every single reservation I've had on every single car, most of which I actually had the intention of buying, have had the rug pulled from underneath me from huge manufacturers who can afford to actually fulfill their promises. It's greed and exploitation and it's BS.

Rivian can absolutely deliver current R1S and R1Ts at previously advertised prices or they wouldn't have had the IPO they had. Costs have not increased that much. What happened is the price of the stock has gone up since, insanely so, and now they're trying to dial back in profits that can't reasonably exist in 10 years based on the business plan they had going in with the IPO. They're not going to go belly up, they didn't work their asses off to keep a promise. They saw an opportunity to keep their stock performing at current levels and took it.

Ford dealerships, Hyundai dealerships, Rivian, Kia, does the list end? Who since the Model 3 SR has reasonably honored their high demand reservations? I think the answer is no one. Literal no one in the US market. The Bolt/Kona/M3 generation was the last honest generation of EV car purchases.

EVolved said:

A lot of whiffs here. The $35k Model 3 was delivered with better specs than originally announced. Typically, Tesla delivered cars that had features/specs, exceeding the expectations of the owners. A few former Bolt owners on this forum will vouch.
How does the RIVN price (which is actually less than the IPO, not up insanely) affect their profitability goals? You have the cart before the horse here. Rivian has no obligation to hit a certain P/E ratio reflective of the valuation. RIVN gamblers are betting on hunches either way, just like TSLA, F, GM.

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I don't think it's a whiff, it was off-menu and they likely lost money on every single one (at the very least in the first 6 months-year) they sold because of the bespoke nature. I'm saying Tesla is a good actor on the M3 and tried their hardest to make Musk's promise a reality even in the face of it being completely stupid.

As for having the cart ahead of the horse, I mean, you're ultimately arguing about the problems of big companies in the public market making stock-price decisions that generally negatively impact broader long-term goals. Boeing a pretty prominent recent example of how this plays out to a much larger degree. A private or better acting company would be way more willing to entertain forsaking short term profit margins for long term customer satisfaction.

It's also a bit of a rabbit hole, the reservation system is a scam at face value at this point until proven otherwise across the board. I literally can't keep track of how many reservations I've had on cars with intent to purchase that something like this has happened to over the past 2 years. Add in the Bolt recall and man it's been a ride for me. I just want to be able to buy a car and drive it and understand the cost and when I'll receive it.

Almost at the point where I'm willing to go ICE or something. The frenzy for EVs is making everything irrational, time consuming and frustrating to the point of I just don't give a **** anymore. Good thing I already own 2 EVs and don't have to worry about this anymore after my swap happens. I'll figure out a better winter car when the Kona lease is up (2024), own the Bolt and get the **** out of this god forsaken market already.

Pete Blair said:

I think you are getting your data mixed up. Rivian IPOed at $78, it hit $171 within the first week. Since then it has been on a pretty steady decline down to the $55 - 65$ range which it has been within most of this year so far. This price increase had nothing to do with their stock performance. Likely it is more related to the challenges they have faced scaling up production as they have been burning through cash faster than expected due to the challenges they have faced. Price increases on raw materials of course are part of that challenge, but certainly not the whole story. It could also be related to the fact that Amazon has signed a contract with a competitor for delivery vans, Amazon seems to be hedging their bets around Rivian being able to deliver all the EV delivery vans they have promised because of these scaling issues.

Honestly this price increase while it may be needed to get the cash flow they need to survive, it could also be the reason they don't. Everyone I know who has a Rivian order has canceled theirs. Seen tons of people on twitter posting their cancelation notices as well. Rivian is being faced with all the "big boys" actually producing EVs now and in most cases undercutting their price. Which the larger companies can afford because they make money through volume not through single models.

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I have not gone back and Googled it and the reason is I understand the narrative and how the exact stock curve happened by the numbers is irrelevant as I'm not an investor I'm a buyer of the product. The initial IPO was reasonably exceeding expectations, it shot up in value, it's gone down and this is a clear response. Those are the only facts that matter to the conversation we're having as far as I'm concerned. I definitely understand how my post read after AZBill's response and was just trying to clear that up using the numbers he presented. Apologies again for muddying the waters here.

Just trying to keep it focused to how they can't justify a $16,000 price increase for any reason other than "hey look at that demand, people will pay it" while having the stock price in their minds while they do it.

I've had this argument many times and I don't want to address the "it's a free market" thing because it gets rather philosophical but when an industry finds a mechanism they can all abuse, they do. This is why we have to have monopoly and price fixing laws. With the batting percentage of satisfied reservation holders where it is in recent years, this has very clearly become a mechanism.

I'll just say there's a reason in every state there's uniform forms and bills of sales, etc., we all get the same yellow slip bill of sale or whatever and it's because this is an industry adept at doing this crap and everything is spelled out by regulation in part to protect the consumer.

We've bypassed all that at a national level with this reservation system and "I accept" without any options to "not accept" and proceed with actually buying a car in the EV space. That's very clearly a ***** in the armor of the free market emerging from a place that's known to have ****** in their armor as a rule.

We've seen single digit % increases in the kinds of raw materials Rivian traffics in on a product they presumably already had high margins built-in. I repeat, there's no accounting for a $16,000 price increase other than, "hey look, people will pay it" and "it's a free market, deal with it" clearly is not the answer. Single digit increases can be steep and matter but this is different, again on a luxury car not a budget car where margins are higher and volumes lower by definition.

Mach-E, ID.4, Ioniq 5, EV6, F150 Lightning, R1S, all cars I would have purchased if they would have honored what they were saying at the time of placing a reservation. It just so happened we cycled out two cars at roughly the same time right as the Pandemic was peaking so I've been taken for quite a **** ride (again, and I'm going through the Bolt recall!). It's just been a lot. Like a lot. A lot of waiting a lot of wasted time a lot of money lent out, a lot of nonsense in ownership of the Bolt.

I find it highly ironic that getting back into a Bolt EV or EUV and not being in this market is going to be a relief since it was the source of endless agita to begin with. I'll have a Bolt and a Kona, two recalled cars that actually now represent the least stress.

Dude the car market has a middle man enshrined and protected by the state to exist, I reject the entire argument that it is a free market. That middle man represents literally every single make and model owned in most cases by mult-billion (yes billion) dollar publicly traded companies that exceed the size of some of the automakers they sell! If they represent the entirety of a single point of access of all cars sold, across every brand, where is the free market?

This is a silly argument to have because at it's flawed at its roots. The new car market is not unregulated. You already live in the Soviet model but just don't want to admit it.

If they're not locking in price, they're not locking in your place in line, what exactly are they giving you? They're offering you literally nothing but your money back if they do decide to alter the arrangement and make it unpalatable. The answer is they're tricking you every time you put that money up. They're able to do that because people have to drive cars and they have all of them.

Over the past 2 years it's been the consumer who eats the inflation end over and over and over again and has to pay the supply problem even when the automaker is against it. Rivian here has some financial issues and whoops, convenient free market arguments fly out, shame on me for trying to buy a car.

Done with it. Never again will I place a reservation on a car. I'd rather drive an ICE if it ever came to that.

redpoint5 said:

I get the frustration and don't really disagree with anything stated here.

You've learned a lesson about the scam that is the reservation system; one that thousands of Tesla Model 3 reservation holders were angry about when they found out it only allowed them first access to the most expensive trims... clearly putting money down on a vehicle that doesn't yet exist is not a good bet. We've seen that anyone willing to pay top dollar gets ushered straight to the front of the line, but that's how everything works. You pay first class, you get on the plane first and get all the amenities that go with spending lots of money.

It amazes me that people are still willing to give interest free loans to manufacturers. I get the appeal though. For only a hundred bucks people get to say "I've got a reservation on a CyberTruck".

Those holding cash always eat the cost of inflation. That's why it should infuriate people whenever senseless inflationary practices are implemented. Some inflation is unavoidable and caused by things like pandemics or conflicts, and other times it's artificially manufactured by spending money we don't have, or indirectly manufactured by preventing development of domestic energy.

I'm kinda always "shopping" and never in a hurry because I've got plenty of older vehicles that serve my needs. The Bolt caught my attention 5 years ago and still has it. Still haven't been able to justify the purchase yet, especially now. My hope is the extreme inflation is very temporary, and pricing will fall back to previous levels, but I have my doubts considering the stickiness of price. That's the nature of inflation though.

Regarding comments about the legacy dealership model, I'm in complete agreement that it's a net harm to consumers. It's still a free market though because the buyer and sellers determine the price. Probably the price would be better if manufacturers sold direct to consumer, because fewer hands in the market chain is a more efficient process. The dealership model is on borrowed time.

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I never missed the scam I just never had a choice. As a 2 EV household I knew I needed one that would weather the winter better and would be a good road-tripper as we have regional family and your options are extremely limited to these next gen EVs (or $45,000+ for the Niro, which doesn't appeal to me and still only has 75kW charging). The only way to do that is to pony up a reservation, or so they say, then they come out and "oh hey look I know you gave me a reservation but that guy has $10,000 to get in front of you on line so, that guy wins." I gave up, right? I wound up with a Kona and a Bolt having leased the Kona when I don't normally understanding it would be a better outlook in 2024. Both are pretty terrible winter EVs that I knew full well going in and wanted one or the other, not both.

Fast forward to the Bolt recall (again omg more frustration) and it's put me back into the market I had just given up on because I lost faith in GM and Chevy and didn't want to plan on owning it past 10 years. Fine, whatever I surrender, I'll take the leather seat bribe (swap) and call it settled until 2024 like I originally decided and resign to taking the '22 for a decade. It's just not worth it anymore.

No one wants to make an agreement to sell a car honestly. Everyone wants to screw you every step of the way right up until the very last second, then blame you when you complain.

I'm so done I'm tired of being done. In 2024 hopefully a system will emerge where I can buy a car for my needs that is sane and you can plan around.

Edit: PS my $70,000 R1S went up to over $95,000 because they also optioned out crap. I got my refund. That's a 33% increase! WTF!!!! Screw what the articles are saying about 20%. You can have one for that 20% more than what was originally $70,000, with less content.

redpoint5 said:

I hear all that. Many purchasing processes are inefficient and aggravating. I just refinanced my mortgage with the same finance company, and they are asking me all the same stuff as if they didn't know me from Jack. The whole process is purposely opaque, and they intend people to not read any of the stuff, so they frustrate them with needless paperwork to "sign". It's 2022 and we still need another human to physically watch a pen meet the paper. It's like living in a future dystopian bureaucracy coupled with ancient practices of putting ink to paper.

Don't get me started on tax code, or realtors.

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LOL, my mortgage company foreclosed on me in error. I refinanced with the same bank but some department marked the old mortgage as being unpaid and through some apparent confusion literally foreclosed on me in 2017. It's 2022 and I'm still fighting them. Literally they're fighting my motion to dismiss (legit, 100% chance to win, they filed the old mortgage account number and there are obviously laws on when you can foreclose on someone). Obviously Covid is dragging it out but I'm not kidding with the particulars of the situation.

I cannot begin to tell you what it's like having to go through the foreclosure court system trying to explain to every judge and lawyer, "no really, I'm not a delinquent home owner, stop talking to me like I am." Every single one of them the best I can figure is so factory-programmed to feel like they're doing me a favor. On top of it the systems in place are all rigid and for the exclusive purpose of trying to get delinquent homeowners back on track, not to figure out how to settle an erroneous foreclosure.

I meet with the lawyer tomorrow to file a counter suit for something. I think we're going to move to make the mortgage uncollectable meaning they'll have a lien on the house but I get to own it without ever having to settle the lien unless I sell.

I can't even begin to tell you how mind altering this experience has been, the Bolt recall is but a blip compared to your bank erroneous foreclosing on you and then not dropping the case unless I paid crazy fees for no reason because I was never actually going into foreclosure for non payment.

My lawyer alternates from scaring the crap out of me saying nothing is a done deal to there's almost no chance I can lose. This is enough to man believe in karma and want to find out what he did that was so wrong to make amends.

I just want to own a house and a car guys, I've worked real hard to get them, am willing to pay for them responsibly. What the **** is going on?! I had an 845 credit rating when they gave me the mortgage! LOL!

Packard V8 said:

We feel your pain. How something so simple can become so complicated? Answer, it's the Chinese ;>)

There's a house in my neighborhood which has been a zombie for four years now. The mortgage was bundled and sold to Chinese investors. It's literally impossible for all the computers we have to figure out who actually owns the house today and how it can be put back on the market.

jack vines

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Actually it's a pretty small bank in Florida that has the mortgage and I've never been able to figure out if it's their servicer or their law firm that screwed this all up. They can't move it while it's in this legal state I think.

It's kind of funny, the bank got a new lawyer (same firm) a month ago and they've begun to play dirty and I think literally just realized their error (I'm DEAD serious). Last month I get a notice in the mail "You're 1172 days delinquent and we're about to foreclose on you."

So they've decided, "Wow, yeah we did screw up but we're going to hope the judge doesn't give you your house outright and we can re-file suit and then you have to pay what we say you owe unless you want to fight another foreclosure battle." But it's stupid because of course I'm going to fight that new foreclosure because it has an additional $50k fees at this point. So - to sum up, they foreclosed on me and made it so I can't pay my mortgage and then 5 years later they start to foreclose on me a second time for the non-payments they wouldn't let me make because they foreclosed on me. This is all legal.

Essentially it's like the Bolt on crack, completely out of my control but there's very little chance I can lose and it's completely aggravating. It's even got me stuck in NY because if I want to sell, guess what, they want that amount THEY say I owe them and not you know, what I actually owe them according to any sane and reasonable person.

I'm somebodies flippant stupid paper work error dragged out for 5 years in town court with no quick justice. Like the motion to dismiss hasn't even been heard in over a year because they're trying to put us through a mediation. This is a mediation for delinquent homeowners and the new mortgage they offer, if they even want to offer me one (their descretion) will include the fees! So 0 chance I accept, I have to go through the process and I get to sit in front of a judge called a "ref" who treats me as if I'm a deadbeat in person literally every time.

bro1999 said:

Whatever they are doing, they are 100% tanking the stock. My god, every move they make is a shot in their foot as far as their investors go.

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Well I know I revealed my ignorance in the actual particulars of the price of the stock earlier but the problem is once everything is this speculative who gives a crap. Long term I'd buy them as it's the correct move. When you're building companies this large you're expected to run at a loss for a period of time and that's been true since at least when we've been building rail roads and telegraph lines.

I would have guessed it'd be obvious that doing this to your reservation base in light of those basic business facts is a lot of what set off the price stock sale yesterday. Anyone who thinks like this, meaning, anyone who understands actual investing, was instantly, "holy crap, what the **** is actually going on with this company" when they did this to us reservation holders. Couple that with the VP saying they inflated financials specifically for the IPO? Woo boy.

Ford and Bezos are massively invested and one or both would be top contenders to swoop in and rescue the company. Believe it or not the R1T is part of Ford's bet hedging on the passenger truck segment in case the F150 doesn't make the transition. At these prices if I'm willing to bet on the 5-year term of a company, I would (but I'm no investor). I think Rivian is going to make it because it's become the bet that has to work for people that are bigger than them.

bro1999 said:

I totally see a class action lawsuit in the near future RE: IPO inflating.
I don't think Rivian will go under (some other company will buy them out long before they actually went out of business), but they sure are showing they are new to the public corporation game. Hopefully the CEO learns from these early stumbles and bumbles instead of doubling down like another fellow at a different EV company.

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I really just don't care. I don't want class actions, BS and drama that eventually work out in my favor. I just want an honest marketplace.

I never even thought it possible that a VP of sales would just come out and spill the beans that they were playing with reservation holders all along.

His 30% number is hilarious. From my limited understanding that's not how car supply chains work and the raw materials that have gone up by a lot don't make up the entirely of even a single component. The downward pressures on battery packs themselves has been tremendous and lithium is apparently even a little lower than economists think represents a healthy market. This is a lot of the reason why the used market has gone up but the new market has stayed relatively even by comparison even for EVs. They can afford to make them at a profit still and are maintaining marketplace image at certain price points because it's good for their business model (until dealerships get involved).

None of this is some kind of secret only I harbor, just look at the financials of any of these publicly traded companies. The M3 went from 40k to 45k not 55k and cancel people who currently have orders in because "omg it's expensive!!!!"

Something is super rotten over there and it definitely has an impact on whether or not I want to restore my reservation. I've said it before on this thread but luxury cars over $50,000 are uniquely situated to avoid needing to do things like this because of huge profit margins that are supposed to be built in. We don't even know why the car needs to be $95,000 or if people will pay it yet... sigh.

Colt Hero said:

@RacerX00 : who's side are you on? You seem to be going out of your way to justify these outlandish car prices! Have you ever heard the saying, "a rising tide lifts all boats"? I've got the cash to buy these crazily-priced cars ... but I won't do it because it's just dumb. And, more importantly - it's going to raise the cost of automobiles for everyone.

That's what's happened with real estate over the last 30 years. You want car-buying to become what real estate has become?

We need fewer people saying "well ... the average price is $40k, so what's another $25k ... I'm sure I can get a 15-year mortgage to cover that ..."

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I want to purchase products that have fair market value in a competitive market. With over 30 auto manufacturers in the country, I think we're doing ok there.

No one is putting a gun to anyone's head and ordering them to buy a Rivian. $70,000 for a 7 seater SUV of that size with those specs is $20,000 cheaper than the Escalade it competes with and absolutely in the same neighborhood as the Suburban or Denali.

These car companies make tons of cars that American's don't want. What's your proposed solution to that? Legislating wants? Being mad at America for having enough money to afford better cars than they need?

I'm semi-retired and the R1S was over my budget but I figured, "Hey I could do Uber airport runs in NYC and make up the difference in mere months, why the heck not?" (aforementioned Escalade is a taxi and limousine champ) but I'm certainly not wealthy by any stretch (or I wouldn't be driving Uber, even for fun just to justify a luxury item). So as someone who had a deposit on one in that context, I took a bit of offense being lumped into a category I did not belong.

redpoint5 said:

Oh, I wasn't very aware of the R1S and certainly wasn't aware it was a 7-seater. I guess Rivian is on my radar now. Would be a long time before I owned a used one at half the original price though.

6+ seating is important as the family expands, and at the moment only the Model Y, Model S, and Model X (and Cybertruck) fulfill that requirement that I'm aware of. Y is probably the smallest vehicle I'd be interested in.

Silly to dream about these things as I'm still probably at least 2 years out from buying anything, unless Bolt used prices drastically plummet.

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I wouldn't hold my breath, this is clearly a Model X competitor. I'd expect additional price increases within the first year of delivery with the R1S and they'll do something similar with batteries as they've done with dual / quad motors. Keep the price point, make the 300 mile pack $90-100k w/ quad motors and then the 400 mile pack w/ quad motors will be Model X territory. If that holds true it will likely have Tesla resale value, but you could have a Model S right now too for $30k so

All that means provided Rivian didn't literally just sink themselves with this maneuver, it's likely to be a $70k+ even in used form for the next 5 years as there won't be enough on the market. Looking at those Model 3s right now and they're annoyingly super high resale.

Right now I'm trying to see if I want to restore my reservation and then just flip the car. Free $25k! Who knows maybe I'll execute my Uber plan ahead of time and save for it with the Bolt, I'm bored.

I need to stop getting aggrevated with car companies who screw me and just screw them right back.