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

gregtay

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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).
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mikehmb

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There are many people here that paid current pricing (using the T as an example, since they’re probably still working through pre-order pricing on the S at the moment).

The used market softens pretty quickly once the Gotta Have It Today crowd thins a bit. You’re already seeing R1S flips landing way closer to current MSRP than the +40k premiums a few months ago.

I look at this way - as a pre-order with early pricing, I got a total steal of a deal. I’d pay current pricing for the truck knowing what I know today with the market as it is.


Rivian has proven to be an excellent vehicle in a unique space with market-comparable pricing.

Market comps - if you can call them that - are all in the same ballpark or higher (depending if you want a T or an S):

Competitors to the T ..
1) Raptor R starts over 100k
2) TRX is in the 80k range
3) Even the TRD Pro is pushing past 70k
4) F150 Lightning similarly equipped is easily hitting 100k

For the S:
1) Model X is all over the place depending on Space Karen’s mood, but still at 100k
2) Comparable vehicles with off-road chops are all ICE … Range Rover, Lexus LX, etc, … and they’re all pushing 90-100k with the Range Rover starting over 100k.
 

madgrey

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I'm guessing most people don't have access to a dealership they can drive up to and purchase a used Rivian. Those that go the auction route have to pay a buyer's fee ($4-5K) and get it shipped ($1200-$2700). Used R1T prices have come down considerably ($75K ish). I'm not seeing any problem here, but interesting to see where it goes.
 

pc500

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The flippers are a short term problem. If it gets the vehicle out there, great, but not that many are really flipping as there isn't any money left in it.

Long term their issue is they need to get the price down. A product like this will get a lot more buyers at 70k.
 

tylerdurden03

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I put in an order two weeks ago for an r1t and was able to get a truck through shop a week later. I live in an area close to a service center and took what they had (being careful yo ask which truck was actually at the service center location vs in Normal). I think Rivian is doing just fine with getting supply out there. The more they can do this the more the secondary market will converge on new truck prices. Lastly I was going to get an F150 before I went to Rivian and the mark ups there are insane. In California multiple dealers quoted me $130-$140k for a raptor vs about $75k MSRP. That’s a much bigger issue for Ford than Rivian.
 

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COdogman

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Every new interesting vehicle has flippers. That is just a phase. After they work through the backlog, the R1S will eventually be in a similar situation to the quad R1T where they can deliver within a few weeks. In states like CO where you get a $5k EV credit plus the $7500 federal credit, they are still a great value compared to the vehicles they compete with. That will be even more true when they start selling dual motor vehicles and again when they start selling the R2 vehicles.
 

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I haven't noticed too many R1T immediate flips now but lots of low mile driven for 6 months to 1 year where sellers seem to want to get what they paid back at least. It's probably a combo of buyers regret, needing money back after buying more than they like to pay, or they want the newest shiny thing soon. I'm happy to get my R1T today (just 12 days after selecting it) even for it's $75k price ($80k after taxes basically) but won't be reselling it certainly and really couldn't anyways since prices are more normal now.
 

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There are many people here that paid current pricing (using the T as an example, since they’re probably still working through pre-order pricing on the S at the moment).

The used market softens pretty quickly once the Gotta Have It Today crowd thins a bit. You’re already seeing R1S flips landing way closer to current MSRP than the +40k premiums a few months ago.

I look at this way - as a pre-order with early pricing, I got a total steal of a deal. I’d pay current pricing for the truck knowing what I know today with the market as it is.


Rivian has proven to be an excellent vehicle in a unique space with market-comparable pricing.

Market comps - if you can call them that - are all in the same ballpark or higher (depending if you want a T or an S):

Competitors to the T ..
1) Raptor R starts over 100k
2) TRX is in the 80k range
3) Even the TRD Pro is pushing past 70k
4) F150 Lightning similarly equipped is easily hitting 100k

For the S:
1) Model X is all over the place depending on Space Karen’s mood, but still at 100k
2) Comparable vehicles with off-road chops are all ICE … Range Rover, Lexus LX, etc, … and they’re all pushing 90-100k with the Range Rover starting over 100k.
I paid current pricing, same thoughts re: competitive landscape.

And aside from not wanting to drive an ICE, the fact that the T is a little more compact than the F150/Ram/Tundra is a huge boon for my garage and parking lots.
 

mikehmb

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I paid current pricing, same thoughts re: competitive landscape.

And aside from not wanting to drive an ICE, the fact that the T is a little more compact than the F150/Ram/Tundra is a huge boon for my garage and parking lots.
I came from a full-size, and cannot agree with this more. Being able to park in a garage, and navigate relatively small spaces, is immeasurably helpful.
 

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Yossarian

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Flipping R1T for profit is long gone
This.

From what I can see posted on-line, 2022 R1T's can be had for under $80k. Prices for 2023 model year T's are more, but not by much. No profit, no flippers

Most of the R1S's I see are low-mid $90's but there have been one or two just under the $90k threshold. I guess that would be an OK profit for a flipper, assuming the favorable pricing and the tax credit. It's all but certain that prices in the used R1S market will follow the same pattern as the R1T, and with the same effect on flipping.

It also looks to me that the current Rivian pricing, while high, is actually reasonably competitive. As others have pointed out, you are unlikely to find a Lightning at under what the R1T now sells for, let alone some of the others.

Edit: fix typo
 
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Hillbilly

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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).
I bought the R1T at full price after a test drive of the R1S which we have a early preorder on. Give it a couple of years and this current pricing will look like a steal. I figure the R1T won't get any cheaper anyway.
 

s4wrxttcs

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I think what we're going to see long term is differentiation of the higher end quad-motor R1T/R1S, and the lower end models. First with the dual-motor variants and then the R2. Where the average price paid will trend down as people are buying more lower end.

The pre-price hike buyers are basically getting the higher end for the price of the lower end. That's coming to a close right when the lower end starts to become available.

I think what we'll see around here is a lot of debates from someone deciding whether to buy a new dual-motor or a used quad-motor.

There are lot of arguments to be made against buying used. Things like "the used one is within the first year of making them so you might be better off getting a new one". There is also always going to be the desire to have something new versus a unknown especially with an off-road vehicle where you have no idea what someone put something through. Plus one downside of the Rivian is the body panels and paint are pretty weak so used might have some cosmetic issues that a person isn't going to like.

One thing I'm curious of is the potential of the R1S. I can't be the only one that's noticed a crap ton of new Model Y's on the road. I think the R1S will be a very attractive option to those owners as a vehicle that offers more room and capabilities. I won't be the least bit surprised if the R1S retains pretty high demand for years from the "we gotta have an EV SUV or our kids will disown us" suburbia types. :)

It's also important not to forget about the Cargo van. The lock in with Amazon will end so I expect that to be in high demand as well.
 

SoCal Rob

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I expect Rivian to make running improvements, add standard equipment, and/or introduce extra-cost options. As Rivian adds at the top end with these developments and the bottom end with dual motor, and maybe a new version of de-contented Explore trim, I think there will be plenty of people who want to buy new.
 

Dark-Fx

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I'm guessing they are just finishing up all of the pre-price increase orders and having a lot of cancellations that were people who thought they might be able to make money flipping. Rivian made their vehicles but they didn't end up buying.
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