Only a couple of days after raising its electric vehicle prices on pre-existing orders by as much as 20%, neophyte manufacturer Rivian Automotive Inc. reversed course in the wake of an online backlash and a raft of canceled orders.
Rivian boss RJ Scaringe said that even though the company has been grappling with dramatic cost inflation for raw materials and parts, the decision to raise prices on existing orders was a painful mistake. “Trust is hard to build and easy to break,” he wrote in a letter to customers.
Although the company isn’t profitable (and only recently began bringing in revenue), Rivian can afford to be accommodating after having raised almost $14 billion in an initial public offering in November. But Scaringe, who founded the EV maker in 2009, makes an important point about trust and pricing that the car industry (and other industries for that matter) would do well to heed.
Unfortunately, with semiconductor shortages depleting new vehicle supply, consumers hunting for a new or used car are being squeezed for every last cent. The average used car now costs close to $30,000 in the U.S., while new ones sell for more than $46,000.