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Rivian Cancels Least-Expensive Version of Electric Pickup Truck and SUV

Pioneer74

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The company said in an email to customers that it was canceling the base “Explore” model, which started at $67,500, in favor of the $73,000 “Adventure” trim. Customers can either upgrade to the more expensive trim level or cancel their orders, the company advised. Rivian has also “discontinued” the less expensive trim for its R1S electric SUV, which is expected to start shipping to customers later this year.
https://www.theverge.com/2022/8/18/...s-price-increase-explore-package-discontinued
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cvalue13

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net loss of $1.71 billion in Q2 2022 gonna take a little more than that to fix
 

greenne

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I have a Rivian reservation as a backup, but only interested in an R1s if I can get the max pack battery. Unsure if that is ever going to occur so was holding onto the reservation far a bit. I am post price increase but was able to configure a r1s adventure ~$81k.

This latest email reeks of desperation of from Rivian and is yet another PR misstep. It just rubs me the wrong way, not just because it raises the price by ~$7000 but by the method they did it.

We all know inflation is bad and vehicle prices are going up. Just come out and say that. Don't hide behind this "demand was low" BS. You need more money, just don't try to con me by eliminating the lower trim so I've got no options. Thats some Elon BS right there..the bait and switch. It's just a big turnoff.

This gets even worse because not even three days ago you Rivian was suggesting customers put enter into a binding contract and commit $100 non refundable. It really says something when you can't even make it a week without breaking your end of the deal. Also Rivian has obviously been planning this for some time, why not be transparent and mention it BEFORE you urge people to take that next step. It just comes across as dishonest and a bit shady.

For my configuration the price has jumped to around $90k. For that money I can get a nice BMW iX.

Disappointed in you Rivian, you really need a better management team and/or PR team because this is now two big mistakes within this year.
 
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hturnerfamily

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I think this is also another reason why adoption, at least in MASS, for EVs is suffering, and will likely take MANY YEARS to happen - mass adoption will need a LOWER price point than not only the everyday engine-based vehicles that the public is already accustomed to, but also even the newer PLUG-IN HYBRIDS that 'bridge the gap' between ICE and EV comfort. The public, as much as the advertisements tout EVs as 'easy' and 'fun', are not going to move toward a higher priced and HARD TO GET vehicle that they are not already comfortable with and knowledgeable about, and in many cases, can't even FIND, much less TEST DRIVE!

You 'might' find a Nissan LEAF, but I'll bet you'd be Very Hard Pressed to find ANY electric vehicle on a dealer's lot. We've found that while Ford mandates the DEMO Lightning sit on a dealer's lot for at least 6 months, dealers are deciding to forgo the public's test drive of these machines in order to prevent them from being 'used' too much before the Auction starts on day 1 of month 7. The public rarely gets a chance to even test drive one of the greatest vehicles of the last 100 years. But, I understand the dealer's point of view, too. This is a different time compared to several years ago when a dealer STRUGGLED to find any potential customer to grace their doors.

The fact that we are now forced to pay not only MSRP, but the public at-large also additional money on top of that, AND have to 'reserve' a potential invitation to order, and 'maybe' get an email to order, AND wait a total of 15 months to even receive the vehicle - it's no wonder folks are not adopting EVs. Well, I guess that's good, since the manufacturers are new to this and can't built them fast enough, anyway.

Rivian is just another example of trying to 'feel' their way in the market, both with design, and with pricing, but other things outside of their control are getting in the way of keeping those initial prices in place. Ford is feeling it. Tesla deals with it, whether or not they actually ever come out with any 'truck'. No manufacturer is going to be able to skirt around it. GM will eventually produce the Silverado EV, but at a higher price than initially revealed. No one is immune. We just have to decide if we want to put up with it, or not. No one is forcing anyone to buy a vehicle. That's on us.
 

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gorwell

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Go look at Rivian forums, no one really cares about this. The community is not outraged. The article found the one person who was mad in a thread that was only 2 pages long on the less active Rivian forum.

Pretty sure they are right, the lower end trim wasn't being ordered. The price difference was $5,500, and people with this builds had no real delivery time frames; they were last in line to be built once they got through the LE and the Higher Trim. Most likely everyone on this forum would pay $5k more for a Lightning if if pushed up their delivery by ~1yr. Like going from Lariat to Platinum for $5K instead of $20K; it's a no brainer.

The Rivian is ultimately a Luxury Vehicle, it's on par w/ the Platinum. There was no "Least Expensive" version. This doesn't price anyone out who was actually going to buy the Truck. If you where struggling to find $5K more on a $70K truck, you shouldn't have been buying it in the first place.

The main thing Rivian is struggling with is Supply to build trucks. Having to just source and build one trim is going to allow them to make more Trucks for less money. It's almost no different than why Ford is allowing very little customization for Lightnings -- keep costs down and need to source supply limited.
 

LightningShow

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Good business move. They shouldn’t be selling a truck for $67k. I question whether they should be selling anything under $80k. It’s an absolute pricing debacle IMO.
 

monsterlag

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TIL there was a $67k spec. Quad Motors and 300+ mile range for $67k was never gonna happen.

This really isn’t that big of a deal and just goes to show again how wildly underpriced these things were to start with.
 

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I have an Explore reservation. Large phantom drain, reliability issues and a few other things had me on the edge already. This pushed me over the edge. The reason they stated they made this decision is something they must have known for years. Explore has always been in lower demand. They just seem too disoriented and their decisions are not confidence inspiring. I really wish the company succeed. However at this point neither the cool factor nor the pre price gate pricing is worth the roller coaster ride for me. I leave the adventure package for the truly adventurous.
 

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Maxx, You hit the nail on the head. I think 50% of the Rivian issues are software related, 40% are management related and the finial 10% are hardware related. My main concern is this, will Rivian be selling vehicles to retail customers in 2-3 years? I think for the company to survive they will transition to a B to B model manufacturing Amazon vans and other delivery style vehicles and drop the R1T/S altogether. The market for the R1T is going to get saturated quickly and they can't make a profit selling the R1S for less than 100K. They had a shot if they would of delivered the R1S first and on time 18 months ago but they missed that window and I think it will cost them dearly.
 

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Maxx

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Maxx, You hit the nail on the head. I think 50% of the Rivian issues are software related, 40% are management related and the finial 10% are hardware related. My main concern is this, will Rivian be selling vehicles to retail customers in 2-3 years? I think for the company to survive they will transition to a B to B model manufacturing Amazon vans and other delivery style vehicles and drop the R1T/S altogether. The market for the R1T is going to get saturated quickly and they can't make a profit selling the R1S for less than 100K. They had a shot if they would of delivered the R1S first and on time 18 months ago but they missed that window and I think it will cost them dearly.
The new tax laws are buying them some time by keeping some of the forign competitors like Koreans out of the race for a while but there is only so much money they can save by firing people. At some point they have to hit the customer pockets by expensive parts, labor and services. When it is matter of survival, they won’t care as much about the image and by then they may become smarter and more stealthy on how they implement it. Owning one at that point may not feel as good as having one when it is new. These days buying into a brand is like marrying someone. Crazy girlfriend may be a fun short term experience you can survive but crazy unpredictable wife? Not my cupa tea.
 
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PungoteagueDave

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The issue for RIvian is that they are losing money on EVERY truck that they sell. They have a huge negative gross margin on every single vehicle, and a negative gross sales margin for every quarter. Their cost per truck exceeds $100k (excluding sales costs, G&A, amortizing R&D, equipment depreciation, etc - just production costs). To put this in perspective, Tesla has never had a single quarter with a negative gross margin, and they have never sold a single vehicle at a gross margin loss (that is sales price less cost to build that specific vehicle). They had a lot of quarters with GAAP losses, but NEVER one with a gross sales margin loss. Rivian's are huge and it is telling you they cannot make money selling trucks at the current price/cost ratio.

Tesla has never had a quarter with gross margins below positive 17%, and has averaged over 25% gross margins, sometimes closer to 30%. While I suspect that Ford loses money on every Pro that it sells, I also suspect that its Lightning line is in the black. Rivian has no way out of this because it would need to price its trucks at $120k+ just to make a return on investment. I agree with Elon Musk's assessment - they are toast. Having scoured their financials every quarter, there is no option - it is not about volume, it is not about supply chains, it is all about the truck costing far too much to build compared to their committed sales price, and what a consumer will pay for such a truck. They also have design issues, but those are minor compared to the rock and hard place that they face financially.
 

LightningShow

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The issue for RIvian is that they are losing money on EVERY truck that they sell. They have a huge negative gross margin on every single vehicle, and a negative gross sales margin for every quarter. Their cost per truck exceeds $100k (excluding sales costs, G&A, amortizing R&D, equipment depreciation, etc - just production costs). To put this in perspective, Tesla has never had a single quarter with a negative gross margin, and they have never sold a single vehicle at a gross margin loss (that is sales price less cost to build that specific vehicle). They had a lot of quarters with GAAP losses, but NEVER one with a gross sales margin loss. Rivian's are huge and it is telling you they cannot make money selling trucks at the current price/cost ratio.

Tesla has never had a quarter with gross margins below positive 17%, and has averaged over 25% gross margins, sometimes closer to 30%. While I suspect that Ford loses money on every Pro that it sells, I also suspect that its Lightning line is in the black. Rivian has no way out of this because it would need to price its trucks at $120k+ just to make a return on investment. I agree with Elon Musk's assessment - they are toast. Having scoured their financials every quarter, there is no option - it is not about volume, it is not about supply chains, it is all about the truck costing far too much to build compared to their committed sales price, and what a consumer will pay for such a truck. They also have design issues, but those are minor compared to the rock and hard place that they face financially.

This is pretty much why I'm not buying a Rivian...even though I'm super impressed by the product. The R1S is very, very tempting BUT an established automaker will have a solid three row SUV on the market soon enough. I can wait.
 

PungoteagueDave

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See I actually think Ford has been either taking a loss on all trims except Platinum or been very very close. I hope Rivian stays, whatever it takes. Its great to have options and for them to even build trucks is a huge lift that is an accomplishment of itself. Elon says their garbage because he doesnt want to have to compete against another EV truck against the so far vaporware cybertruck.

They have cash on hand, are making trucks, and demand continues to go up. We should all be cheering Rivian even if we dont plan to buy one because it puts pressure on the big three to tighten up the garbage we have put up with for the past 15 years. As long as they keep getting orders, keep making them and get their Adventure Network rolling, they will be fine.
They have enough cash on hand to survive three more quarters at current burn rate. They have belayed their planned factory construction and are laying off staff. There is no path forward for Rivian. Said as the former CFO of a public company and current board member of several companies, audit chair of one - I teach corporate financial modelling at the graduate level - there is no model that gets these guys out of the hole unless they start charging $125k per truck - and then there is no market for the truck.

I love Rivian and their products, am a huge fan, have no dog in the fight (not an EV investor or short). I do think they made a massive mistake allowing their trucks to be used as support vehicles for Ewan McGregor and Charlie Boorman's "Long Way Up" debacle that showed EV's cannot be used for long distance adventure travel (everyone had to be towed, Rivians, Harley Livewires, etc., and eventually they essentially gave up - watch it on Netflix).
 

sotek2345

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They have enough cash on hand to survive three more quarters at current burn rate. They have belayed their planned factory construction and are laying off staff. There is no path forward for Rivian. Said as the former CFO of a public company and current board member of several companies, audit chair of one - I teach corporate financial modelling at the graduate level - there is no model that gets these guys out of the hole unless they start charging $125k per truck - and then there is no market for the truck.

I love Rivian and their products, am a huge fan, have no dog in the fight (not an EV investor or short). I do think they made a massive mistake allowing their trucks to be used as support vehicles for Ewan McGregor and Charlie Boorman's "Long Way Up" debacle that showed EV's cannot be used for long distance adventure travel (everyone had to be towed, Rivians, Harley Livewires, etc., and eventually they essentially gave up - watch it on Netflix).
Well, no rational business model. Bezos could always swoop in and keep them afloat just to compete with Tesla.

Never underestimate people with far too much money and petty rivalries.
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