Rivian increases prices by up to $16,000

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.

Funny how entitled wealthy early adopters are. The first people to purchase something always pay the most. Tesla buyers were angry they paid more for being the first to purchase when steep price cuts were later made, as if it was completely unheard of for technology to come down in price over time.

BobBolt said:

I think they will continue the trend of extending financing to make it work. 96 months on pickup trucks is pretty standard now.

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I always go with the maximum duration loan that still qualifies for the low interest rate, which has been 5 years. I'll finance even though I can pay cash because at 1.5% financing, my cash can outperform in the stock market. If I could lock in 8 years at a low fixed interest rate, it becomes a hedge against inflation.

RacerX00 said:

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.

...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.

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Tesla mostly did not decontent the $35k car, but instead software limited those features. It seems possible that an owner could be offered to "upgrade" their car for an extra cost via software update. Personally I was most interested in these software limited cars because I could wire in my own switch for seat heating, for example, and the battery should last a lot longer since there is an untapped portion to buffer against range degradation.

Comments claiming anything along the lines of "price gouging" are nonsense. There's no such thing as price gouging in a free market; only the price at which supply and demand intersect. Nobody here would sell their used vehicle at 30% under the now inflated price because nobody here is an idiot. Likewise, manufacturers are going to respond to changing market conditions in both their costs, and the increased pricing due to supply/demand.

RacerX00 said:

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.

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Not really bespoke, as I mentioned above. My guess is they at least broke even, but probably even had some profit margin. Sandy did a cost analysis of the M3 and determined there was likely lots of profit margin. I forget the details, but I recall thinking that the $35k model could even be profitable.

RacerX00 said:

Apologies but I was ranting and not really taking the time to articulate clearly. The drop from $78 to $55 is what I'm saying they're trying to address with this move. The rise to $78 / share was eye-popping and the $55 was the adjustment to people doing the back of the envelope math on how many cars Rivian needed to sell to actually be worth that value.

You're correct.

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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.

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.

RacerX00 said:

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.

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What other way is there to price things in a free market? Do you routinely sell things below market value, or do you expect others to live by a different set of rules than yourself?

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.

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Clearly you want to discuss it since you're bringing it up. The automotive market is far from a monopoly, with many players ruthlessly competing with each other. The free market is what has vehicle pricing as low as it is. The manufacturers have to convince the consumer their products deliver more value than the price, and they routinely accomplish exactly that. You might feel like it's an abuse to price something you want beyond what you want to pay, but that's what markets do all the time, constantly.

Had Rivian had access to a crystal ball, I'm sure they would have set the price higher right from the beginning because disappointing expectation is not good (as exemplified by you). They didn't have a crystal ball, so expectations were disappointed.

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.

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The need for this exists only because our ape consumer brains want things so badly that we have no patience to read the fine print on anything and demand more reasonable contracts. An example of this was cell phone contracts back in the day would have something to the effect of "you promise to pay the bill in full on time, and we will not guarantee our service will even work at all". Everyone signed those contracts because they had to get the new Nokia with polyphonic ringtones.

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.

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LOL, this site blocks c h i n k. Let me test... *****.

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.

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What's the answer? We could do price and production control tactics like the USSR and all wait in bread lines for hours at 4am. Hint- market pricing is the answer. Market pricing can be disappointing, but at least we're not standing in bread lines. It's a self-correcting system because if there are massive profits to be made, then others have the incentive to jump into the market and provide their products, competing against each other. Eventually price comes down.

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.

RacerX00 said:

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.

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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.

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!