Rivian raised preorder prices up to 20%, then called it its 'most painful' mistake

On 1 March 2022 Rivian told customers who had already placed deposits on R1T trucks and R1S SUVs that they would pay up to 20% more, citing higher materials costs. Some configurations were also swapped for less powerful versions at the same price. Rivian had barely over 1,000 vehicles built, and customers called the move a bait and switch; some posted that they cancelled reservations.

The stock fell by double digits on Wednesday. On Thursday, founder R.J. Scaringe published an open letter saying 'I have made a lot of mistakes since starting Rivian more than 12 years ago, but this one has been the most painful.' He said Rivian 'wrongly decided to make these changes apply to all future deliveries, including preexisting configured preorders' and failed to appreciate that customers viewed their configurations as price locked.

Rivian said preorders placed before 1 March would have their price, configuration and delivery date reinstated, including for customers who had cancelled and wanted back in. Scaringe did not retreat on higher prices for future customers, noting the average new vehicle price had risen more than 30% since Rivian first announced its prices in 2018.

Rivian applied the price rise to existing reservations as well as new orders, ignoring that customers saw them as price locked.

It swapped in less powerful versions at the same price, which Scaringe later called a mistake to assume customers would accept.

The notice came without warning, to a young brand whose early word of mouth mattered because it had barely begun production.

Customers who put down deposits treat the quoted price as locked. Repricing existing orders without warning breaks trust faster than any cost justification can rebuild it.

Rivian's shares fell another 5% on Thursday to near their record low of about $50 from late January, against an IPO price of $78 and a plunge of nearly 70% from the peak. Fortune noted the reversal followed other setbacks, including Ford dropping plans to buy chassis from Rivian for a Ford-badged model and Amazon sourcing Ram ProMaster EVs alongside Rivian's own vans. The article does not quantify how many customers cancelled.