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Rivian's pricing problem... how do they solve it?

KWeimer711

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Get your logic, but I believe it is flawed. There are finite number of pre-price hike reservations. If they would have canceled their reservations instead of flipping the vehicles it would still lead to the same number of overall vehicles being purchased/produced.

Sure Rivian is losing out on the ~$15K premium they could get for it now, but again, there are a finite number of pre-price hike reservations...so, how many do you think are really being flipped? 1K? 5K? At 5K, we are talking $75M in total lost revenue...nothing to sneeze at, but not the number that is going to make them go under either.
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HeyEllwood

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We need a R1S before October and if our preorder isn’t close and we haven’t heard anything we’ll be buying a used one (made after 2023 to ensure the most safety features). Would be willing to buy one now but I know the market will be a bit lower here in a few months.

I'm sure Rivian knew this was going to happen and RJ isn’t losing any sleep over this either..
 

HokieBird7980

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I'm an R1T owner (Dec 2018 preorder) and have had it a year. i placed an R1S order about two months before the increase and have not gotten it yet because neither North Carolina nor South Carolina allow service centers for "non dealer" companies. Until the law is changed and Rivian can put a service center closer than 5 hours away, they tell me i won't get my R1S. So....it could be years before i get my pre-price increase R1S. Guarantee i'm not cancelling it since who knows what a new one will cost by the time they can/or want to sell me my pre-order R1S. Willing to wait. No Rush, so long as they honor their contract.
 

Atlrivian

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At least one dealer in the Atlanta area has been ordering their allotment of Broncos for people at the dealership who would then immediately sell them back to the dealership at cost. Then the dealership would offer them "used" with 10 miles on the odometer at a 30k markup to the public. Because of this behavior, my friend waited at the top of the list more than two years for a bronco because he couldn't find a dealer who would order / quote one for less than 30k over MSRP. Flippers are not just a Rivian problem.

My friend finally magically got his allotted vehicle at MSRP by calling out the dealership and working his way up the chain at Ford.
 

Rivdog

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Rivian doesn’t play dealer shenanigans. That’s enough of a carrot for some people at this point. CarMax is literally in existence only because so many people hate dealerships so much that they’ll pay a premium to just have an easy process.
 

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lefkonj

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I have seen half dozen Rivian's on the road today, these people aren't flipping them. They are here to stay. There is no pricing problem that is the going rate, actually cheap for a 3 row SUV with those features. Go price out an EQS, 125k.. an Audi Q8 Etron 100k, ModelX 125k..... Rivian is right where it belongs.
 
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I have seen half dozen Rivian's on the road today, these people aren't flipping them. They are here to stay. There is no pricing problem that is the going rate, actually cheap for a 3 row SUV with those features. Go price out an EQS, 125k.. an Audi Q8 Etron 100k, ModelX 125k..... Rivian is right where it belongs.
I think today's pricing is great.. it's a deal. We are moving to it from an Etron S (and an SQ8 before that) thr Rivian is a deal at today's pricing. I just hope Rivian can keep the new orders coming in with all the "used" options undercutting a new ones.
 

omsatt

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I am curious to see what happens when all the current pre-price hike preorders are delivered. The number of people taking delivery, taking the $7500 and selling for $20k more than they paid and pocketing $~$20-30k) has to be killing Rivian's future order banks. How can Rivian keep the order books full if the "flipper/used" market is stuffed with R1S? My point is.. if someone wanted an R1S today (and didn't already have an order)... they would simply go buy a "used" one for $90-$98k and park it in their driveway Why wait? Rivian lost that sale. There is not much reason for someone to get on the wait list today because the "used" market has tons of supply without the wait. To make things even more challanging... I expect the "used" market prices will continue down a bit. So if in six months you can buy a "used" R1S for $85k (that seller is still making good $$$), why would I sign up to buy from Rivian at $95k? Is Rivian going to have a very difficult time selling a new $95k R1S? Maybe the lower spec/priced models help them get out of this mess?

My local Fiat/Dodge dealer has basically turned into a used Rivian dealer with at times 6-7 R1S and another 5 R1Ts sitting on their lot... and they last about 2 days. We stopped by to test drive one (closer than the SC) and they basically have a Rivian sales specialist that knew all the ins and outs of the car (seriously felt like he has worked over at the SC before coming to this dealer).

One issue with this is that some people buy these vehicles through their businesses. You can't write off a used R1S/T the same way you write off a new one. That right there makes the new SUV the more attractive option.
 

BigSkies

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These are high priced luxury vehicles. Which means they will depreciate RAPIDLY once they become widely available. Remember that old adage about losing 30% of value the moment you drive it off the lot? It hasn't been true for the last three years, but it will be true again in the near future.

I expect Rivian will eventually do something to further differentiate a "low end" vs "high end" offering in the R1 line. There's a very large pool of buyers below the $80k MSRP tax rebate cap that won't be interested above that price point. I expect Rivian will come out with a somewhat pared back version they can consistently price below $80k and a higher end $100k+ version with quad motors and all the offroad upgrades. My guess is they'll announce this around the time the work through a big part of the pre-order backlog.
 

Autolycus

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At least one dealer in the Atlanta area has been ordering their allotment of Broncos for people at the dealership who would then immediately sell them back to the dealership at cost. Then the dealership would offer them "used" with 10 miles on the odometer at a 30k markup to the public. Because of this behavior, my friend waited at the top of the list more than two years for a bronco because he couldn't find a dealer who would order / quote one for less than 30k over MSRP. Flippers are not just a Rivian problem.

My friend finally magically got his allotted vehicle at MSRP by calling out the dealership and working his way up the chain at Ford.
Did Ford prohibit markup on new vehicles? Why did they need to go through the extra transaction? (which in most states would trigger an extra expense in the form of sales tax)
 

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Atlrivian

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Did Ford prohibit markup on new vehicles? Why did they need to go through the extra transaction? (which in most states would trigger an extra expense in the form of sales tax)
Ford has been making all sorts of veiled threats for a while now, but in February (I think) they finally threatened to reduce allocations for dealers who mark up beyond a certain point. I guess this dealer was trying to find a loophole.
 

R1TCA

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“They last about two days..”
that’s all I need to hear to believe that the demand for R1’s is not going anywhere soon.
 

R1Tcali

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The federal tax credit has basically ended for most Rivians delivered after April 18 2023.

The old pricing plus sales tax/ registration , minimal if any fed tax credit , doesn’t give a flipper much wiggle room.

new IRS rules for all vehicles delivered after April 18th:

First you have to be under the income limit 300k/150k. Married/single

Second the vehicle has to be under 80k and the credit is now only $ 3750

no quad motor Rivian qualifies
most of the dual motor R1T would qualify.
one R1S qualifies, dual motor standard battery.
 

Headingley

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Until the law is changed and Rivian can put a service center closer than 5 hours away, they tell me i won't get my R1S. So....it could be years before i get my pre-price increase R1S. Guarantee i'm not cancelling it since who knows what a new one will cost by the time they can/or want to sell me my pre-order R1S. Willing to wait. No Rush, so long as they honor their contract.
Well that's the keypoint. They likely wont wait....my guess is that once the dual motor enduro units are fully in production and the new R2 is up and running....they'll stop/drastically reduce production of the quad motor units and you will likely never get your pre-ordered R1S. I'm in Canada and my province has no service centre and likely wont get one. I had a previous delivery date in summer 2021 (2020 pre-order; LE R1S), now I'm in a perpetual state of limbo. I'm sure Rivian knows I wont ever get my LE R1S, but I don't think they want to cancel pre-orders for the optics, better to just string us along I guess.
 

AYAYRON

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I am curious to see what happens when all the current pre-price hike preorders are delivered. The number of people taking delivery, taking the $7500 and selling for $20k more than they paid and pocketing $~$20-30k) has to be killing Rivian's future order banks. How can Rivian keep the order books full if the "flipper/used" market is stuffed with R1S? My point is.. if someone wanted an R1S today (and didn't already have an order)... they would simply go buy a "used" one for $90-$98k and park it in their driveway Why wait? Rivian lost that sale. There is not much reason for someone to get on the wait list today because the "used" market has tons of supply without the wait. To make things even more challanging... I expect the "used" market prices will continue down a bit. So if in six months you can buy a "used" R1S for $85k (that seller is still making good $$$), why would I sign up to buy from Rivian at $95k? Is Rivian going to have a very difficult time selling a new $95k R1S? Maybe the lower spec/priced models help them get out of this mess?

My local Fiat/Dodge dealer has basically turned into a used Rivian dealer with at times 6-7 R1S and another 5 R1Ts sitting on their lot... and they last about 2 days. We stopped by to test drive one (closer than the SC) and they basically have a Rivian sales specialist that knew all the ins and outs of the car (seriously felt like he has worked over at the SC before coming to this dealer).
What you're seeing at your local used car dealer is not proportionate to the entire country, they're buying these up at auction so they can hold inventory it's their sales strategy, and not a good one, which is why no one else is doing it.
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