(Reuters) – Rivian Automotive Inc has rolled back price hikes on electric vehicles booked before March 1 after facing backlash from customers following a 20% increase in prices.
Preorders as of March 1 will not be subject to the new prices, and customers who canceled orders can reinstate them with the original price, Chief Executive Officer RJ Scaringe said in a letter to clients on Thursday.
The Amazon-backed company on March 1 increased the base price of the Rivian R1T electric pickup to about $79,500 from $67,500, while the R1S SUV went to $84,500 from $70,000.
The price hike spurred some customers to cancel orders and express frustration, accusing the company of “betraying” its early supporters, according to social media postings.
“It was wrong and we broke your trust in Rivian,” Scaringe wrote.
“I have made a lot of mistakes since starting Rivian more than 12 years ago, but this one has been the most painful.”
Rivian stock, which plunged over 13% on Wednesday, extended losses on Thursday, down 4%.
Scaringe reiterated that the price increase was prompted by inflationary pressures and higher component costs.
Average new vehicle pricing across the United States has risen more than 30% since 2018 when it started to receive preorders for the RIT, he said.
Rivian reservation holders welcomed the move.
“I’m back on with Rivian. Super sincere apology from RJ and they are making it all good,” Zach Jump-Start Marino, who canceled his pre-order after the price increase, said.
“100% trust and confidence restored. This is the right move,” Zack Nelson, who made a reservation for R1T in 2018, tweeted.
The new prices will remain in place for orders placed after the announcement.
“We think the damage has been done and many customers will be purchasing EVs from competitors instead,” said Garrett Nelson, analyst at CFRA Research.
(Reporting by Akash Sriram in Bengaluru and Hyunjoo Jin in San Francisco; Editing by Saumyadeb Chakrabarty, Shinjini Ganguli, Devika Syamnath and Cynthia Osterman)
