On March 4, the Wall Street Journal reported that the US electric vehicle company Rivian made a sharp price increase on its electric pickup truck models on Tuesday, and the price increase was also applicable to orders placed several years ago, resulting in large-scale unsubscribes from customers. Today, CEO RJ Scaringe issued an apology letter saying that customers who had previously placed orders could purchase at the current price.
Rivian was founded in 2009 by RJ Scaringe, who holds a Ph.D. in mechanical engineering from the Massachusetts Institute of Technology. The 39-year-old has charted an attractive prospect for investors, not only to sell electric vehicles to the average consumer, but also to attract companies that are prepared to reduce their overdependence on fossil fuels. Previously, he focused on producing high-performance sports cars, but now he is also focusing on segments such as trucks, SUVs and crossovers.
Customers who placed orders years ago are undoubtedly the most loyal advocates of Rivian and RJ Scaringe. When they can't see a production car yet, they dare to order a pricey electric pickup truck directly, which is the biggest support for The Rivian, a start-up. Today, Rivian's retrospective price increase has undoubtedly broken their hearts.
After such a wave of turmoil in Rivian, many customers may turn to tesla and other car companies. Tesla's Cyberruck may achieve mass production next year, in fact, it does not need to wait for a long time.
Rivian's price increase was due to rising costs for components and materials. Rivian can cope with rising costs like Tesla, but retrospective price increases are undesirable, which will greatly reduce the company's reputation.
After Rivian released a retrospective price increase, Tesla CEO Musk tweeted that Rivian's negative gross margin was amazing. A major factor in Tesla's rapid success is its high gross profit margin. Its gross profit margin can reach 20-30%, which is far beyond the level of traditional car companies.
Many of the parts of models such as the Model 3 and Model Y are shared. For example, they use the same seat belt, and only one extension lever is added to the Model Y. Rivian could adopt a similar strategy to boost gross margins as quickly as possible, which is key to the survival of a start-up car company.