Rivian Shareholder Sues Automaker for EV Price Increases
Rivian CEO RJ Scaringe drives the first production R1T pickup off the production line in Normal, IL.
A shareholder in Rivian Automotive has sued the electric vehicle manufacturer over a recent price increase for two of their models.
The complaint by Charles Larry Crews, who claims Rivian purposely hid how underpriced the R1S SUV and R1T pickup truck were, this leading to MSRP-hikes soon following Rivian’s November initial public offering (IPO). Crews stated that these increases could tarnish Rivian’s reputation and put a large portion of it's 55,400 pre-orders at risk.
2022 Rivian R1T
The price increase, issued on March 1st, would see the base MSRP of the R1S climb from $70,000 to $84,500; the R1T would increase from $67,500 to $79,500. Following customer backlash, Rivian rolled back the increases, stating that any preorders made as of March 1st would still start at their initial prices. Any customers who canceled their preorders would be able to reinstate them for their initial price.
Rivian CEO RJ Scaringe issued a letter of apology, lamenting the loss of trust built between the brand and consumers. Primary reasons for the price increases are component and material costs, “from semiconductors to sheet metal to seats,” though he noted an average new vehicle price increase of 30 percent since 2018. The adjustments were made in planning current and future production costs.
“As we worked to update pricing to reflect these cost increases, we wrongly decided to make these changes apply to all future deliveries, including pre-existing configured preorders,” Scaringe said. “We failed to appreciate how you viewed your configuration as price locked, and we wrongly assumed the announced Dual-Motor and Standard battery pack would provide configurations that would deliver price points similar to your original configuration. While this was the logic, it was wrong and we broke your trust in Rivian.”
Scaringe went on to note Rivian’s lack of communication, having not provided enough insight into what was causing these changes. In this same letter, the aforementioned rollbacks for previous preorders was announced. Crews, however, called this rollback a “futile attempt at damage control.”
Rivian, an Amazon-backed company, first went public in November 2021, with an initial share price of $78; this raised about $12 billion, making it the largest IPO of the year.