Rivian Needs a No Re-Sale Clause Now

[Tall_Rider]

Okay! I did not not think this would generate quite such strong feelings! Let me amend my suggestion: Rivian should implement a one-year ROFR to buy-back the vehicle at the sale price if you decide to sell it. Is that more acceptable?

Not going to fly. ROFR would be fine if it's at the offer price (i.e., what someone in the free market is willing to pay). A court is not going to rob a consumer of the appreciation of their good.

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[ironpig]

Okay! I did not not think this would generate quite such strong feelings! Let me amend my suggestion: Rivian should implement a one-year ROFR to buy-back the vehicle at the sale price if you decide to sell it. Is that more acceptable?

no it's still stupid. It's simple. Buy it and you own it. And you get to do whatever you want with it. Period. Stop giving away your rights to companies for nothing in return.

 

[SeaGeo]

They definitely need to halt pre-order swapping. Lock in the name on the accounts.

says a guy that pre-order swapped.

 

[ja_kub_sz]

What's crazy to me is that several of you are arguing to restrict your rights as consumers. No disrespect, but are you brainwashed? This is a company selling you a product for your hard-earned cash. It just walked back (after huge backlash) a move to screw you. But you're not satisfied and you're asking for more? .

You are a sage good sir or madam ?

 

[TexasBob]

Not going to fly. ROFR would be fine if it's at the offer price (i.e., what someone in the free market is willing to pay). A court is not going to rob a consumer of the appreciation of their good.

If you are making a legal point then I respectfully disagree. This sort of contract is completely enforceable and not at all uncommon.

If you are making a philosophical point - that once its yours you should have the right to do with it whatever you please - then I respect your view, but I would argue that in this sort of case where Rivian selling vehicles at a loss to honor its social contract with the pre-order reservation holders, the company would be justified to protect its market by not allowing customers to flip vehicles they do not want and undermine its pricing.

 

[WildBlueYonder]

Does anyone have insight on how this has worked out for Tesla honoring pre orders that are immediately worth more than paid upon delivery?

If Tesla suspects you of flipping a car, they will cancel a pending order and/or prevent you from buying a car from them. Not sure (haven't seen) how long they impose that 'ban.' There are instances in TMC where folks have sold a Y before their next one was delivered and the pending order was canceled. One specific instance I was following was a person that had a 5-seat Y, ordered a 7-seat one, and after selling his 5-seater they canceled his 7-seat order under the 'flipper' provision. The person was unsuccessful fighting it, with their local Tesla dealer's support, despite (claiming) to have have had several Teslas and being an early adopter. It doesn't seem like a straight forward flipper case based on the one side explanation, e.g. trying to go from a 5-seat to a 7-seat model Y.

 

[Tall_Rider]

If you are making a legal point then I respectfully disagree. This sort of contract is completely enforceable and not at all uncommon.

If you are making a philosophical point - that once its yours you should have the right to do with it whatever you please - then I respect your view, but I would argue that in this sort of case where Rivian selling vehicles at a loss to honor its social contract with the pre-order reservation holders, the company would be justified to protect its market by not allowing customers to flip vehicles they do not want and undermine its pricing.

Then we disagree legally. I would agree that it's not as slam-dunk as a restriction on sale, but as I said, I don't see a court robbing a consumer of gains on their product. If this was a dealer doing multiple markup resales, perhaps. It doesn't begin to account for the scenarios I've suggested above. Nor is it practically enforceable by Rivian or frankly worth their legal efforts.

Let's not get into the "social contract". Rivian is a for-profit company doing things to preserve its business and reputation. It's not a charity or doing anything for the public good. Let them come after me for a potential resale and I'll have a good time dragging them through the mud.

 

[aburke00]

Then we disagree legally. I would agree that it's not as slam-dunk as a restriction on sale, but as I said, I don't see a court robbing a consumer of gains on their product. If this was a dealer doing multiple markup resales, perhaps. It doesn't begin to account for the scenarios I've suggested above. Nor is it practically enforceable by Rivian or frankly worth their legal efforts.

Let's not get into the "social contract". Rivian is a for-profit company doing things to preserve its business and reputation. It's not a charity or doing anything for the public good. Let them come after me for a potential resale and I'll have a good time dragging them through the mud.

Just a thought here, but with the reliance of these vehicles on ongoing technology and updated software, I wonder if companies like Rivian, if not allowed to restrict resale, could refuse certain updates that diminish/restrict functionality in the event of an ownership change within a stated period of time.

 

[the long way downunder]

So Rivian has done the right thing and reinstated the pre-order pricing for all of us that had an order on March 1. It now needs to add a one-year no resale clause in the sales contract to prevent people grandfathered into the old pricing from taking advantage of their discount to profit from non-pre-order customers. (Rumor is that Ford is doing this with the Lightning and it is a routine clause for many fleet sales, e.g. Police department SUVs.) IMO people should not be able to take advantage of the discounted price for the purpose of undercutting higher-dollar sales Rivian would otherwise make to those who are not grandfathered.

EDIT: Okay, okay! I did not know this would generate quite so much negative energy! Let me amend my suggestion: Rivian should implement a one-year ROFR to buy-back the vehicle at the sale price if you decide to sell it. Is that more acceptable?

Any "no flipper" clause is only a "no soup for you" … so the flippers (usually dealers or in conspiracy with dealers) end up in a 1 year lock-out clause or need to use their spouse's credit to buy the next one.

 

[nc10]

Let them come after me for a potential resale and I'll have a good time dragging them through the mud.

I’m ok if there is a change of heart or financial hardship. But…on the other hand, I’m sure there are plenty of people (hand raised) willing to help any court/legal effort to halt scalping.

Scalping isn’t really creating any value. Usually just a drag on the economy. In this case it would keep Rivian from getting another sale at the latest “less money losing price”, hurting shareholders and future customers in the long term. Seeing the scalping of PS5’s during the holidays, iPhones a few years ago, hand sanitizer and face masks in 2020 is just beyond frustrating.

 

[Drogon]

No way. No restrictions. Rivian made a business decision, saw its stock get clobbered (lost $7.5 billion of mkt cap), and then it was reversed. They have all the numbers and they made the decision that WAS BEST FOR THE COMPANY. Could you imagine what would happen to their valuation if on the next earnings call they came out and said orders were sequentially down by a large %? This is a growth company - they arent expected to make large profits at the beginning, but they are expected to show growth POTENTIAL for people to see. I would like to make the decision that is BEST FOR ME whenever I can, just as they can.

Im not in the camp of even wanting to sell mine - I like the product. To think they reversed the px increase out of the pure goodness of their hearts is crazy. They had a financial incentive to undo it and therefore we should have the ability to do as we please.

 

[Tall_Rider]

I’m ok if there is a change of heart or financial hardship. But…on the other hand, I’m sure there are plenty of people (hand raised) willing to help any court/legal effort to halt scalping.

Scalping isn’t really creating any value. Usually just a drag on the economy. In this case it would keep Rivian from getting another sale at the latest “less money losing price”, hurting shareholders and future customers in the long term. Seeing the scalping of PS5’s during the holidays, iPhones a few years ago, hand sanitizer and face masks in 2020 is just beyond frustrating.

The number of people who want to shoot their own feet is ridiculous.

 

[Tall_Rider]

Just a thought here, but with the reliance of these vehicles on ongoing technology and updated software, I wonder if companies like Rivian, if not allowed to restrict resale, could refuse certain updates that diminish/restrict functionality in the event of an ownership change within a stated period of time.

They could certainly do that, but this is another lawsuit and looks awful for Rivian from a PR standpoint. Maybe Rivian should just focus on its business of producing and selling vehicles and not worry about the resale market. I understand not selling into a reseller arrangement, but they shouldn't bother policing what an individual consumer does.

 

[Drogon]

I’m ok if there is a change of heart or financial hardship. But…on the other hand, I’m sure there are plenty of people (hand raised) willing to help any court/legal effort to halt scalping.

Scalping isn’t really creating any value. Usually just a drag on the economy. In this case it would keep Rivian from getting another sale at the latest “less money losing price”, hurting shareholders and future customers in the long term. Seeing the scalping of PS5’s during the holidays, iPhones a few years ago, hand sanitizer and face masks in 2020 is just beyond frustrating.

How does this qualify as "scalping"? Most of us put in an order b/c we liked a product at the price that was advertised. We didnt corner the market in something to then sell it at an artificially inflated price later on. None of us knew that this massive px increase was coming.

Also, if people w early orders do sell their Rivian, will they get some windfall profit - yes. But this money (just like in a real scalping example, which this is not) doesnt die. They go and buy other things with it - toothpaste, airline tickets, food, gas, invest in stocks, bonds - both which fund companies who pay employees and make things, or deposit in savings that banks can lend out. Money circulates, it doesnt just stop. Its not a drag on the economy.

If someone is in possession of an asset that now commands a higher price b/c of scarcity or being early, is that bad? Houses are in short supply now and prices are rising here b/c of many of the pandemic related reasons that Rivian needs to raise prices - should we all sell our houses at the 2019 prices b/c we bought it earlier at a lower price? Should we sell our AMZN stock from 10 years ago at that price? At the time of purchase NO ONE KNEW any of these assets would be priced higher, but now a market check would tell you they are. The same should hold true for a vehicle purchased by an individual consumer.

 

[Gsxr150]

So Rivian has done the right thing and reinstated the pre-order pricing for all of us that had an order on March 1. It now needs to add a one-year no resale clause in the sales contract to prevent people grandfathered into the old pricing from taking advantage of their discount to profit from non-pre-order customers. (Rumor is that Ford is doing this with the Lightning and it is a routine clause for many fleet sales, e.g. Police department SUVs.) IMO people should not be able to take advantage of the discounted price for the purpose of undercutting higher-dollar sales Rivian would otherwise make to those who are not grandfathered.

EDIT: Okay, okay! I did not know this would generate quite so much negative energy! Let me amend my suggestion: Rivian should implement a one-year ROFR to buy-back the vehicle at the sale price if you decide to sell it. Is that more acceptable?

100%, Sir. If you're buying a Rivian after this goodwill gesture with intentions to flip it. GTFO, now. If life situations change...totally understand that. A year is reasonable.

PS - That "negative" energy you're feeling is called GREED.

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