[O. horridus]

The price debacle seems more like a coup than a business decision. Is RJ still in charge, or was he pushed aside by the board? Serious question... Note the email came from "Team Rivian" and not from RJ, like you would expect.

The pricing change is a change in business model, moving to a Lucid-type model where you can get away with low volume / high price goods and still please the wall street types. But that's significantly different than the way the company was pitched for the IPO and indeed since the beginning of the company. The target demographic has changed drastically now that the vehicles have crossed the psychological threshold of $100,000.

Specifically, for luxury goods, price doesn't have much connection to cost of production - a $1000 bottle of wine doesn't cost 100 times more to produce than a $10 bottle of wine, for example. Choose your own example if you don't like mine - the point is that pricing doesn't necessarily have anything at all to do with cost, and that's especially true in the case of luxury goods. In Rivian's case, the vehicles aren't costing 20% more to produce today than they did a year ago when they made their last (small) price adjustment. Especially when you consider they already have many of the materials already on hand for the production. (And $1750 extra for white? How is that attributable to "inflation"?)

To me it almost seems like a way to goose the value for a sell-off. Even if they lose half the pre-orders, they can drastically increase the profit margin, and the valuation numbers will then make more sense. This seems like a hostile takeover move rather than a long-term strategy for success.

 

[RivianDoc]

The price debacle seems more like a coup than a business decision. Is RJ still in charge, or was he pushed aside by the board? Serious question... Note the email came from "Team Rivian" and not from RJ, like you would expect.

The pricing change is a change in business model, moving to a Lucid-type model where you can get away with low volume / high price goods and still please the wall street types. But that's significantly different than the way the company was pitched for the IPO and indeed since the beginning of the company. The target demographic has changed drastically now that the vehicles have crossed the psychological threshold of $100,000.

Specifically, for luxury goods, price doesn't have much connection to cost of production - a $1000 bottle of wine doesn't cost 100 times more to produce than a $10 bottle of wine, for example. Choose your own example if you don't like mine - the point is that pricing doesn't necessarily have anything at all to do with cost, and that's especially true in the case of luxury goods. In Rivian's case, the vehicles aren't costing 20% more to produce today than they did a year ago when they made their last (small) price adjustment. Especially when you consider they already have many of the materials already on hand for the production. (And $1750 extra for white? How is that attributable to "inflation"?)

To me it almost seems like a way to goose the value for a sell-off. Even if they lose half the pre-orders, they can drastically increase the profit margin, and the valuation numbers will then make more sense. This seems like a hostile takeover move rather than a long-term strategy for success.

 

[RivianDoc]

It does seem very non-RJ-like where he wants to change the world one EV at a time—to turn off so many who have waited so long to support this product and his dream.

 

[RITVT]

The trust issue surrounding all of this is going to be really hard for Rivian to recover from for many people. Regaining that trust is going to take a lot of time & unnecessary effort. Was there some sort of amnesia happening in advance of this upcoming (and most-likely difficult) earnings call? Did all the execs selectively forget entirely about all of the early reservation holders that started their not so insignificant customer fly-wheel spinning years ago? This entire customer experience (or lack thereof) & pricing debacle is going to become some meaty MBA material for a solid GTM curriculum - what an incredible case study!

In the end though, we know it's all about Rivian's overly anxious & myopic focus on short term quarterly earnings. Ironic to think that we are implicit and a big part of this. Our early adopter & reservation status was used to boost Rivian's share price. This is why many of us are feeling the burn from a super solid rogering today. And as an extra bonus and double-ended rogering, we were offered unfettered access to a special allocation of Rivian shares by Morgan Stanley on listing day (and, what we believed could be an entirely different kind of automobile company - RIVN!!!). A company with a view that was purported to think thoughtfully about its forward leaning customers and about the future - one with a big, bold, long-term vision that could be a catalyst for real change. Well, that was a nice story about all the kids & the play dough and the composting lectures at the local "experience center". Thanks - we already compost though.

Let's face reality. Once public, the leadership team was pressured by B.O. D. They then weighed the short term fallout consequences (miscalculated most likely - based on today's sentiment and reaction from reservation holders, media and shareholders), and they basically said, "Hey, Thanks! & Fuck-off!" to all LE & early customers. Even worse, they did it with a classic, crap-tastic and poorly written Rivian CS email. Is it just me, or are all communications from Rivian crafted to be "douchey but with a little smile on top?" Who even likes that snarky, entitled communication style? Comms has been an issue from day #1 (thank you to R.J. Cringe for finally acknowledging this in his open letter to reservation holders last year).

And, this is what REALLY makes the trust issue here that much worse:

"Hey, I know we have been shitty, condescending & very spartan with our communications, but we promise to fix that moving forward, and we can't wait to get you behind the wheel! Maybe! If you are super lucky! And U don't want Apple CarPlay" -RJ

So instead of something reasonable in terms of possible (real) inflationary-related price increases on specific items, or increases tiered by reservation month or date, we get the lamest-ass possible communication yet. And, to top it off, we get it just as we are getting abs-o-fucking-lutely STOKED to take deliveries in the next month or two?

This is most troublesome aspect to me - even more than the price increase itself.

What does this actually say about the brand and what Rivian will stand behind?
What does this say about all of Rivian's previous virtuous emails and dubious claims?
What does this say about the recent and questionable executive departures?
What does this say that makes me actually want to be seen behind the wheel of a vehicle with a Rivian badge on the hood?

Man, I was so ready to hitch my awesome adventure-ass party wagon right up to the R1T and blow a few tank turns in the desert (well I guess that was back in 2019 when those were a thing).
Now? I dunno what to think... Actually, I do know, but I just don't know where all of this leaves me:

I think I might be embarrassed to take ownership of a Rivian-branded vehicle
I lost that awesome vibe about all the good stuff & great things ahead for Rivian
I blew my budget for a completely unplanned 21% price increase (right before delivery) on my solar installation last year, so financial planning got "slightly askew"
Should l worry about Rivian's ability to Service & Support my vehicle?
Will my free adventure network subscription & charging at RAN's cost me $100 bucks a month upon delivery?
Why do I feel so dirty?

I guess I feel worse for everyone in the media that was also duped and communicated the "value story". But mostly I feel bad for the other people that I got excited about this company, including my own family. In the end, this trust issue is the real dagger, and for many will be the final straw after years on the camel's back.

 

[sciencegeek]

'cmon guys this sort of thing is decided collectively at the board level with major risks looming if not compliant with the law and SEC rules.
The decision to go forward with this and tick off people in the process was made rationally.
There's no way they underestimated the backlash from the enthusiasts and early reservation holders.
They factored that in.
And they went ahead with it.

Do I like having to pay more? No. Will it price out some people who are understandably upset? Yes and that's a shame. They knew all this and they believe it's in the best interest of the company to take this route. Again, I'm not saying I like it, I'm just saying it's expected.

 

[O. horridus]

this sort of thing is decided collectively at the board level with major risks looming if not compliant with the law and SEC rules

Sure, that works great. Theranos.

 

[sciencegeek]

Sure, that works great. Theranos.

Very different. Theranos was a fraud from the start ... it's my area of expertise, I knew it immediately. No product, no new technology. Rivian trucks and SUVs actually exist and they're amazing. Very different.

 

[O. horridus]

Sure I know they're different in many ways, my point in mentioning them is solely to respond to your claim that a board of directors and SEC rules and oversight constrained the actions of Rivian. Theranos had those checks and balances too, but that didn't stop egregious fraud by Theranos. And in the case of Rivian, where I'm not even implying fraud, those checks and balances mean even less.

Back to my original point - this move is out of character and inconsistent with the stated objectives of the company. If RJ were involved in this decision, I expect it was a long and drawn-out fight to cede some of his objectives to the money people. It would have been a deeply personal decision, and he would have communicated that himself to justify his decision. Or they just overruled him and he is effectively no longer in control. And since Rivian IS a public company (unlike Theranos), their corporate charter matters - if they don't govern the company in a manner consistent with their public objectives, and if they change their basic fundamental business model without shareholder approval (I'm saying changing to be exclusively a luxury item is an entirely different business model), then as a public corporation I'm pretty darn sure they're in violation of some SEC regulation, and the individual board members may also be liable.

 

[bbg523]

Folks just remember who the real customer is here- Amazon! With a 100K order and surely contract delivery deadlines/fines looming, where is your focus going to be?
Despite all the hipe around culture and the environment and the customer- we are all just side noise to the real customer. This is a great way to thin out the R1S/R1T orders to refocus the materials and work force to the van production line. Besides- RJ is just fine- he has his R1S.

 

[RITVT]

RJ appears to be 100% OK and feeling better than ever. 👏

 

[TessP100D]

The trust issue surrounding all of this is going to be really hard for Rivian to recover from for many people. Regaining that trust is going to take a lot of time & unnecessary effort. Was there some sort of amnesia happening in advance of this upcoming (and most-likely difficult) earnings call? Did all the execs selectively forget entirely about all of the early reservation holders that started their not so insignificant customer fly-wheel spinning years ago? This entire customer experience (or lack thereof) & pricing debacle is going to become some meaty MBA material for a solid GTM curriculum - what an incredible case study!

In the end though, we know it's all about Rivian's overly anxious & myopic focus on short term quarterly earnings. Ironic to think that we are implicit and a big part of this. Our early adopter & reservation status was used to boost Rivian's share price. This is why many of us are feeling the burn from a super solid rogering today. And as an extra bonus and double-ended rogering, we were offered unfettered access to a special allocation of Rivian shares by Morgan Stanley on listing day (and, what we believed could be an entirely different kind of automobile company - RIVN!!!). A company with a view that was purported to think thoughtfully about its forward leaning customers and about the future - one with a big, bold, long-term vision that could be a catalyst for real change. Well, that was a nice story about all the kids & the play dough and the composting lectures at the local "experience center". Thanks - we already compost though.

Let's face reality. Once public, the leadership team was pressured by B.O. D. They then weighed the short term fallout consequences (miscalculated most likely - based on today's sentiment and reaction from reservation holders, media and shareholders), and they basically said, "Hey, Thanks! & Fuck-off!" to all LE & early customers. Even worse, they did it with a classic, crap-tastic and poorly written Rivian CS email. Is it just me, or are all communications from Rivian crafted to be "douchey but with a little smile on top?" Who even likes that snarky, entitled communication style? Comms has been an issue from day #1 (thank you to R.J. Cringe for finally acknowledging this in his open letter to reservation holders last year).

And, this is what REALLY makes the trust issue here that much worse:

"Hey, I know we have been shitty, condescending & very spartan with our communications, but we promise to fix that moving forward, and we can't wait to get you behind the wheel! Maybe! If you are super lucky! And U don't want Apple CarPlay" -RJ

So instead of something reasonable in terms of possible (real) inflationary-related price increases on specific items, or increases tiered by reservation month or date, we get the lamest-ass possible communication yet. And, to top it off, we get it just as we are getting abs-o-fucking-lutely STOKED to take deliveries in the next month or two?

This is most troublesome aspect to me - even more than the price increase itself.

What does this actually say about the brand and what Rivian will stand behind?
What does this say about all of Rivian's previous virtuous emails and dubious claims?
What does this say about the recent and questionable executive departures?
What does this say that makes me actually want to be seen behind the wheel of a vehicle with a Rivian badge on the hood?

Man, I was so ready to hitch my awesome adventure-ass party wagon right up to the R1T and blow a few tank turns in the desert (well I guess that was back in 2019 when those were a thing).
Now? I dunno what to think... Actually, I do know, but I just don't know where all of this leaves me:

I think I might be embarrassed to take ownership of a Rivian-branded vehicle
I lost that awesome vibe about all the good stuff & great things ahead for Rivian
I blew my budget for a completely unplanned 21% price increase (right before delivery) on my solar installation last year, so financial planning got "slightly askew"
Should l worry about Rivian's ability to Service & Support my vehicle?
Will my free adventure network subscription & charging at RAN's cost me $100 bucks a month upon delivery?
Why do I feel so dirty?

I guess I feel worse for everyone in the media that was also duped and communicated the "value story". But mostly I feel bad for the other people that I got excited about this company, including my own family. In the end, this trust issue is the real dagger, and for many will be the final straw after years on the camel's back.

Well said and thank you