Is there demand at the new price?

[Jayhawkeye]

It's every bit worth a 100K price tag, so yes there will be a huge market.

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[Ladiver]

I don't think it's fair to assume that in the next few years other manufacturers will pick up efficiencies and be able to reduce prices to offer strong competition without assuming that Rivian can also achieve improvements in efficiencies and adjust their pricing as well.

A similarly optioned Lightning is basically the same price as the pre-order R1T. After the price change, there is a delta, but the R1T is also more capable in the ways that matter to the target demographic than the F150E will be.

I will be utterly surprised the first time I see an electric truck designed and intended for off-road use that comes in drastically under the pricing of the R1T.

I think Rivian's (assumed) target market was the outdoor/adventurous Patagonia crowd. When they announced their initial pricing, their target market was nearly any truck/SUV person who wanted an EV, including F-150 and Silverado people. Now that the new pricing has been seen, Rivian's target market has shifted drastically from a potential F-150 buyer to a Range Rover buyer. It was like switching from Bud Light to a 50-yr aged scotch.

 

[ElCapiTan]

There will be abundant competition for the R1T/R1S by 2024, much of it available for less money.

What competition are you considering that is less money?

 

[mini2nut]

The R1T and R1S are the first offerings from the Rivian vehicle portfolio. The rumor is a lower priced Wrangler/Bronco fighter is the next Rivian coming down the pike.

Being an outdoor adventure vehicle brand you know they are working on a Quad Motor off-road oriented van with amazing camping features.

 

[jtshaw]

I'm not worried about the demand for the R1's at all. I would have paid the new price for mine, as I imagine a lot of folks would have. If the timelines were the same I'd get the dual motor variant and pay less, but that is because at the end of the day I know the quad motor R1S is overkill for what I'll use it for.

The whiplash with the price changes wasn't really about the price as much as it was the big step all at once, the spectacular failure at setting expectations, etc. If they had increased prices for new orders in Spring of 2020 or 2021 and done it again a little while later like a lot of folks had done nobody would be talking about this. Particularly if they had announced the dual-motor variants more quickly.

All that said, their current valuation to me implies three things going reasonably well in the future. First, we need to see if Rivian can really take a chunk of the fleet van market. Second, they need to expand internationally, preferable to both Europe and China if not further. Third, we need to see Rivian can go downmarket as they improve their economies of scale. The order of these doesn't necessarily matter...

 

[E.S.]

There will be abundant competition for the R1T/R1S by 2024, much of it available for less money.

Curious, what do you consider to be abundant competition for less money taking into consideration everything the Rivians come with? I don't see anything that meets it (may come close, but definitely lacks noticeable features).

 

[mgc0216]

I think Rivian's (assumed) target market was the outdoor/adventurous Patagonia crowd. When they announced their initial pricing, their target market was nearly any truck/SUV person who wanted an EV, including F-150 and Silverado people. Now that the new pricing has been seen, Rivian's target market has shifted drastically from a potential F-150 buyer to a Range Rover buyer. It was like switching from Bud Light to a 50-yr aged scotch.

This is an interesting observation as I never thought they competed with Ford I always thought they competed with Land Rover. Granted I wasn't there at the beginning, only discovering them in the spring of 2020 and not ordering until late summer 2020

 

[KiloV]

I think the lower trim is a good option and maybe the sweet spot, but really curious how much demand there will be near $100K. It certainly won't be what they predicted.

Rivian's intent was to start at the high end of the market with the R1 "halo" products. Rivian has already started offering lower-spec options for the R1 platform to manage cost, which is a good idea; but I think the plan was always to move down-market with the R2+ products. So, the R1 with the highest spec will compete with other vehicles priced $85K-110k. The R1 with lower spec options will compete at the $70K-85K tier. The R2 will likely be aimed somewhere in the $50K-70K range. I expect to hear Rivian talking about the R2 products sometime after ground is broken on the GA plant. The GA plant is where Rivian intends to manufacture those R2 products, whatever they may be.

 

[NY_Rob]

Well it certainly would be interesting to see new deposit numbers since the 3/1 price increase went in to effect vs. the last 8 days in Feb at the lower prices.

 

[LaunchGreen]

I think Rivian's (assumed) target market was the outdoor/adventurous Patagonia crowd. When they announced their initial pricing, their target market was nearly any truck/SUV person who wanted an EV, including F-150 and Silverado people. Now that the new pricing has been seen, Rivian's target market has shifted drastically from a potential F-150 buyer to a Range Rover buyer. It was like switching from Bud Light to a 50-yr aged scotch.

Their target market was never F150 people. It was always a high-end product targeting the wealthy "adventure" crowd, directly targeting Land Rover. In fact, as part of their IPO filing, they stated that around 80% (don't have exact number in-front of me) of pre-order holders had never owned a truck.

 

[sevengroove]

Rivian's intent was to start at the high end of the market with the R1 "halo" products. Rivian has already started offering lower-spec options for the R1 platform to manage cost, which is a good idea; but I think the plan was always to move down-market with the R2+ products. So, the R1 with the highest spec will compete with other vehicles priced $85K-110k. The R1 with lower spec options will compete at the $70K-85K tier. The R2 will likely be aimed somewhere in the $50K-70K range. I expect to hear Rivian talking about the R2 products sometime after ground is broken on the GA plant. The GA plant is where Rivian intends to manufacture those R2 products, whatever they may be.

Came here to say exactly this.

It might not matter that there isn't exponential growth in demand for the R1 line. What I'm hoping to see as an investor is an announcement in the next quarter or so about the purported R2 line. That will be their bread and butter money maker, assuming they can scale up appropriately.

 

[Inkedsphynx]

I think Rivian's (assumed) target market was the outdoor/adventurous Patagonia crowd. When they announced their initial pricing, their target market was nearly any truck/SUV person who wanted an EV, including F-150 and Silverado people. Now that the new pricing has been seen, Rivian's target market has shifted drastically from a potential F-150 buyer to a Range Rover buyer. It was like switching from Bud Light to a 50-yr aged scotch.

I'm not sure I'd say Bud Light to 50-year Scotch. For one, 50-year scotch is WAAAAAY more expensive compared to a case of Bud Light than a Rivian is to an F150 or something of that nature.

If the Bud Light crowd is paying 70k+ for a work-oriented F150, then I don't think it's a stretch to get to 100k for even some of that crowd. Plenty of youtube vidoes of people in US geographies with lower average incomes taking their 70k+ Raptors out to do stupid stuff with.

Every vehicle is more expensive right now, even ICE trucks. There are THOUSANDS of stock Raptors and the like in my area, I see them constantly. There are even more people with Tacos and 4Runners and whatnot that, by the time you take into account all the modifications they've made to those vehicles for offroading/overlanding (literally the most popular vehicular activity in the PNW) most of those individuals have paid 60-70k+ for their vehicles, and for many of those, that's not accounting for inflation and price increases (Using Tacos as an example, mid-2010s models are the most common because they had the best engine).

I think the Rivian market has always been, at least, the patagonia-adjacent crowd (personally I've never once set foot in one, but I could certainly afford to if I wanted. I'm a pretty simply dressed guy most of the time tho, other than my guilty pleasure of funky sport/suit coats lol), so I agree with you there. I think the market has shifted enough that the 'Bud Light' crowd at least has some cross-over as well and plenty of them will still be willing to at least comparison shop. I think the bigger headwind in that crowd is brand loyalty to the existing manufacturers.

Rivian is differentiating themselves enough, for now, that they will likely at least be an option. I also agree with another poster that these are the flagship models, akin in your analogy to the full size Range Rover (or even some of the special editions like). R1s are nicer than either of the last 2 LRs I owned (Velar and Defender) for context (my objective assessment). I expect Rivian to introduce more budget-friendly models in the near future. Tesla did the same thing - led with the high-end products because it maximizes profit (whether in total or per unit) and minimizes manufacturing requirements (fewer buyers) while you build your operational footprint to scale.

Rivian will have no trouble surviving. They have a bunch of large institutional investors who have vested interest in seeing them succeed, even if it's in competition. They have a strong support base built out now and current demand to meet their supply. As with every company, the marketplace can and will change, and there is a whole team, if not teams, of people at Rivian dedicated to forecasting that and attemping to ensure Rivian stays solvent and in operation. It takes a LOT to kill a company the size Rivian is now, especially one that has a demonstrably produceable and profitable product.

I've thought this through quite a bit (I manage risk for a living) and I always arrive at a position of comfort in both my vehicle purchase (I would honestly be willing to pay up to 120k for my currently-optioned R1T in LE format. That is where, to me, the value proposition starts to change, but it's still not something I feel risk over. No car is an investment.) and my current stock holdings, which are sitting at a loss were I to sell (Again, even if they operate at a valuation of 40B for the next few years, it takes a lot for a company worth that much to just vanish. In my mind the absolute worst-case scenario is another established manufacturer acquires them and integrates the brand under the parent umbrella).

So, I just don't get the doom and gloom. There's one particular forum member here who literally seems like they're trying to force that to happen, they post so often about it. I think it's all unwarranted. If Rivian were going to fail, it would have happened during one of two stages - the first 2 years, or the last 2 years (especially given the pandemic impacts).

 

[SoCal Rob]

It's really, really interesting. While people are using the "no other car that does __" argument that won't be true 2 years from now when they make it through pre-orders and the price increase hits.

There will be abundant competition for the R1T/R1S by 2024, much of it available for less money.

And by then Rivian will hopefully demonstrate that they can deliver a quality vehicle with a good customer experience so people will be able to cross-shop the competition and realize that Rivian still represents good value.

 

[Engi_Nerd]

If it were available today, i would be fine ordering a dual motor explore trim with large pack at the new prices. IMO, the quad motor is overkill for onroad folks, the power tonneau seems janky, and I don't find gear guard very useful without a dash cam. This vehicle would still offer the core Rivian experience at a near-mainstream price, which I view as air suspension, tweener size, and luxe interior. The obvious problem is the two year delay which is just way (way) too long for folks that have been waiting all this time. Even for new folks, two years seems hard. There will be a lot of Lightning vehicles on the road by then and very likely tens of thousands of cybertrucks.

 

[VHRivian]

As an R1S reservation holder I have been focused on the large SUV segment in determining relative value. My December 2020 price of just under $80k for all of the options I want puts me in the same ballpark (or even a little cheaper) than a comparable Tahoe. Clearly that's too cheap for a Rivian, so I have no issue with the future price. Having said that, I was going to have to cancel my order at the proposed $98k it was moved to simply because that's too much money for me. Based on the relative cost of BEVs and ICE vehicles I think the $100k price point will work for the target buyer without any issues if they deliver the product quality we are all hoping for.

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