Skeptical Of Rivian's Prices

[emoore]

Here's my question concerning this post, has anyone from Rivian specifically stated that a price change is coming??? Not based on what other companies are doing, but specifically what Rivian is doing?

While I don't think they will raise prices, Tesla just raises prices without any warning or communication. I don't think Rivian would do that but it's possible.

Sponsored

 

[St Bernard]

While I don't think they will raise prices, Tesla just raises prices without any warning or communication. I don't think Rivian would do that but it's possible.

They obviously will raises prices for new orders sometime in the next few months. Why not? But they are not going to raise prices on deposit holders. Even Tesla is not doing that on THIS ROUND of increases.

 

[rgrunert]

If the price increase, which I think it will come post IPO, is applicable to both existing and new reservation holders. Like yourself, i plan to cancel and get me a Tesla Model Y

Got the model Y LR a year ago and I have never had a better car. Go for it. I need a truck to get to the backcountry and to camp . I will be selling my Yukon XL 2500 when I get for the RS1. Its a different need .

 

[thedole]

Tesla just raises prices without any warning or communication. I don't think Rivian would do that but it's possible.

For sure, Rivian will warn before doing it!!!

 

[camaroz1985]

Got the model Y LR a year ago and I have never had a better car. Go for it. I need a truck to get to the backcountry and to camp . I will be selling my Yukon XL 2500 when I get for the RS1. Its a different need .

The Rivian is replacing our Suburban 2500 too. As of now I am going R1T, but my wife thinks we need a 6 or 7 passenger for the one or two times a year we use that, so maybe R1S instead (or in addition).

 

[ads75]

Prices will increase, only question is when. My 2019 Jeep Wrangler JLR stickered just above $50k. A similar build now stickers at $55k, a 10% increase over about 3 years (I ordered late 2018). I placed a R1T preorder in late September 2021. I would hope for it to be ready late 2022, but 2023 would not surprise me. I would not expect a major price change for a pre-order holder, but Rivian won't want to sell at a loss either. The tax incentives will play heavily to price changes. The R1T is already at the high end of what I am willing to spend on a vehicle.

I also have a Lyriq reservation. I am only getting one of them (unless R1T seems delayed and I get the Lyriq to eventually trade in for the R1T). The Lyriq seems very well equipped for $60k, only really missing AWD in my mind, and I need to get to work (and home from work) in all weather conditions. Now the R1T optioned they way I want is about $77k. Is the R1T worth $15k-$20k more, probably, its a truck, AWD/4WD, almost 400 more hp. Do I want to spend $15k-$20k more is a decision I will have to make in 6-8 months, I am assuming the Lyriq will be ready before my spot for the R1T. At this point I have more faith in GM to get the Lyriq out closer to its projected date than Rivian. That's not supposed to be a knock on Rivian, but GM has been doing this longer.

Rivian may need to increase its prices eventually, but they also risk pissing off/alienating customers, especially preorder holders if they do. As others have said, I am also wary of a potential subscription model.

 

[André]

They obviously will raises prices for new orders sometime in the next few months. Why not? But they are not going to raise prices on deposit holders. Even Tesla is not doing that on THIS ROUND of increases.

Tesla CAN'T do that because you have a contractual purchase order at a fixed price when you order with Tesla. Rivian preorders are an indication of interest with absolutely no commitment on pricing... they may keep prices the same for all preorders when and if they raise prices but they could raise them if they want. Tesla can't although they are known for shipping later orders at higher prices before older orders at lower prices to improve margins on some quarter ends.

"Several pre-price increase Model S buyers who saw their delivery dates pushed are reporting being told that they could take delivery this month if they update their orders and accept the new $10,000 higher pricing."

https://electrek.co/2021/08/10/tesla-apologizes-new-model-s-delays-worrying-things/

 

[Arthur Itiz]

My first post on the forums. I placed a preorder for the R1T last night. My thoughts on this are as a start up Rivian will price aggressively to establish themselves and thus, will be very hesitant to raise prices before they even build their first batch of trucks.

I base this on a few observations:

1. Amazon. They are invested heavily into Rivian and will use them to build out their fleet of delivery vehicles across the country. Here is a guaranteed revenue stream and Rivian can sell to Amazon at whatever price they want, making this 'cash cow' fund any losses on the consumer side..

When Amazon first started they were very aggressive at building their customer base. I was comped some very expensive purchases (in the thousands) and the only reason I can think of is because they were still solidifying their customer base, and wanted happy customers. I think this business model will carry over to Rivian, in that they won't sacrifice customers with price increases.

2. Which leads to my 2nd point: deposits are refundable. No start up is going to risk the millions in deposits due to a price increase before they've filled at least a sizable number of the preorders. If preorders start dropping due to price increases investors might look sideways at the stock price. Especially for a company that has no deliverables but has a stock price above others selling hundreds of thousand of vehicles every year.

3. Rivian is first in this market and they aren't going to want to risk that momentum. Period. Which circles back to point 1 - Amazon will write the check to fill in the losses. Initially.

So sleep tight, fellow future Rivian owners. I think we're safe.

 

[Sgt Beavis]

Obviously this is all speculation, but everything that sounds too good to be true always is. Tesla's cheapest vehicle with air suspension is $95K and that's a smaller vehicle with a smaller battery. I just don't see how a brand new company can sell an 800 HP EV truck that competes with Land Rover suspension and interior quality for what they're quoting.

Air Suspension is not that big of a deal. It can be found on the Jeep Grand Cherokees starting in the low 40s and some RAM trucks. One thing I keep remembering about the model S is that it was a very expensive car to build. A lot of that was because Tesla insourced a large number of components that traditional OEMs would have gotten from 3rd party suppliers. Another thing was the complexity of the Model S’ body.

Tesla did a lot to lower the costs to make the Model Y. A lot of that was lessons learned from making the S. Rivian got a bit of an advantage in learning how to build bodies because of their partnership with Ford. Ford supplied several body on white examples and provided manufacturing consulting. I think that is going to exponentially help keep costs down as well as help Rivian in things like paint and body gaps (something Tesla still has issues with).

I do still think you’ve got a lot of good points worth considering. But I also think Rivian is limited in how they can raise prices. They definitely want to allow for tax credits. The R1S really pushes up against that $80K cap. The R1T can quickly get up to that pricing as well.

 

[AndroidAppBundle]

You don't think Rivian would have bad communication skills? If there is one thing Rivian is known for....it's bad communication, or lack of communication.

Cause they sure aren't known for making vehicles.....

I crack myself up...

While I don't think they will raise prices, Tesla just raises prices without any warning or communication. I don't think Rivian would do that but it's possible.

 

[hola29]

Who knows, but they can certain afford to take a loss on launch editions. They are currently very well capitalized with many many financing options available in almost all forms.

Not sure what I would do, but I would not be pleased to have waited almost 3 years and a price change.

I have said since the R1T and R1S prices were revealed that despite the vehicles being obviously quite expensive, they are actually a an amazing value when you consider what you're getting and what you're competing against. Unfortunately I am personally becoming less and less convinced that these advertised prices can actually be legit due to a few reasons:

GUT FEELING 1: No meaningful price adjustments conveyed despite significant inflation and supply chain disruption, huge increases at Tesla

GUT FEELING 2: Current Model Y Performance is $63K, 82 kwh, dual motor, fixed suspension. $68K R1T has 135 kwh, 4 motors, adaptive air suspension, and a much larger vehicle. Lucid's cheapest vehicle is ~$80K. New vehicles like EV6/Ioniq5, Mach-E are all easily pushing $60K+, despite being much smaller, simpler vehicles with much smaller battery capacity.

GUT FEELING 3: Comparable pricing to Ford Lightning (similarly equipped), despite Ford being able to leverage huge swaths of their existing F-150 production line and supply chain. Despite this, Ford will still only build 20K units in 2022 and will prob not make money on them.

FROM THE HORSES MOUTH: Exec from discrimination lawsuit claimed exactly this, that pricing structure isn't realistic and that Rivian's plan is to increase prices post-IPO

Obviously this is all speculation, but everything that sounds too good to be true always is. Tesla's cheapest vehicle with air suspension is $95K and that's a smaller vehicle with a smaller battery. I just don't see how a brand new company can sell an 800 HP EV truck that competes with Land Rover suspension and interior quality for what they're quoting.

 

[Max]

OP has great points. Here are a few things to consider:

1 - Looking at customer service and the fact that R1 is newer than M3 and MY, I have no doubt Rivian has much lower margins on these vehicles. However when comparing with Tesla, keep in mind that at current rate of orders coming in vs Tesla’s capacity to produce them, there is no cost or risk associated with their price increase. It would be stupid not to. Rivian on the other hand has less orders than both CT and Lightning. Although they are not making much now, at 150K/year capacity they stated, and 50K orders they have now, they need more orders not less and price increase will dampen interest.

2 - Some of the people that can afford a Rivian are a bit older and ready to kick the bucket soon. They may not care about saving the planet. Currently, Rivian prices can still be justified for someone that has no problem buying ICE but once it goes higher, Rivian may lose some of those people to ICE.

3 - Rivian is thinking of R1S and R1T as printers and plans to make money off of ink cartridge (service and accessories). If you buy some one else’s printer, they can sell you their cartridge. You know that privacy statement you can not opt out of: “we only share your information with our business partners”? Amazon may have already bought your data.

4 - As others have mentioned tax incentives may put a cap on pricing.

 

[Craigins]

Although they are not making much now, at 150K/year capacity they stated, and 50K orders they have now, they need more orders not less and price increase will dampen interest.

Just to clarify a little. They either have 155k orders at 150k/yr capacity, or 55k orders at 65k capacity. The R1 line has a max capacity of 65k/yr. The other 85k is for the van line.

They are not scheduled to reach production capacity until the end of 2023.

 

[fotoflux]

Just to clarify a little. They either have 155k orders at 150k/yr capacity, or 55k orders at 65k capacity. The R1 line has a max capacity of 65k/yr. The other 85k is for the van line.

They are not scheduled to reach production capacity until the end of 2023.

Is the van line really 85k capacity? That's interesting that they are prioritizing commercial over consumer. They must really want to focus on the market opportunity in that space. I mean, it makes sense. There are fewer competitors and creating a first-mover advantage in that space could be a huge asset for the company. However, as a pre-order holder, I am bummed that they may become known as a commercial van company one day and the consumer line may become less and less important if commercial becomes their most viable business line.

 

[Craigins]

Is the van line really 85k capacity? That's interesting that they are prioritizing commercial over consumer. They must really want to focus on the market opportunity in that space. I mean, it makes sense. There are fewer competitors and creating a first-mover advantage in that space could be a huge asset for the company. However, as a pre-order holder, I am bummed that they may become known as a commercial van company one day and the consumer line may become less and less important if commercial becomes their most viable business line.

"The current annual installed capacity for the R1 platform and RCV platform is approximately 65,000 and 85,000 vehicles, respectively.". From the S-1 A3.

Doesn't have anything to do with priorities. The vans are much simpler and easier to produce.

Think of it as having 2 parallel lines with the same work capacity. The R1 vehicles take 30% more work to produce compared to the vans.

Sponsored