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Rivian Was Sued by an Investor Over the Rollercoaster Approach to R1S and R1T Prices

Rivian surprised everybody when they announced a massive price increase a week ago. Disgruntled customers started to drop reservations in droves and Rivian stock tumbled before CEO RJ Scaringe apologized and promised to honor existing reservations at the original prices. But not everyone is happy with this arrangement, and one investor took his discontent to court.
Rivian was sued by an investor over the rollercoaster approach to R1S and R1T prices 6 photos
Rivian was sued by an investor over the rollercoaster approach to R1S and R1T pricesRivian was sued by an investor over the rollercoaster approach to R1S and R1T pricesRivian was sued by an investor over the rollercoaster approach to R1S and R1T pricesRivian was sued by an investor over the rollercoaster approach to R1S and R1T pricesRivian was sued by an investor over the rollercoaster approach to R1S and R1T prices
Price hikes are part of the new normal in recent months, and in general, people tend to cope pretty well despite the inconvenience. But when Rivian announced a 20% price hike for its R1T truck and R1S SUV, everyone was startled. It wasn’t considered just a normal price hike, which Rivian CEO put on the increased bill of materials, but an indication of an outright scam.

According to Automotive News, a Rivian investor sued the company on the grounds it had mispriced its EVs before the IPO only to hike the prices shortly after Rivian got listed. Charles Larry Crews filed a complaint in the U.S. District Court in San Francisco, saying that the price increase “would tarnish Rivian’s reputation as a trustworthy and transparent company.” He wasn’t impressed with Rivian CEO RJ Scaringe taking corrective action and apologizing either, calling it “a futile attempt at damage control.”

The lawsuit came after Rivian announced on March 1 it would be raising R1S's price to $84,500 from $70,000, and the R1T's price to $79,500 from $67,500. Two days later, the EV startup backtracked saying that preorders as of March 1 would not face the higher prices. Customers who canceled orders could also reinstate them at the original prices.

In the March 3 letter to customers, Scaringe said inflationary pressures and higher component costs led to the price increases. “It was wrong and we broke your trust in Rivian,” Scaringe wrote in the letter. However good this was for the company’s image, it also means Rivian will sell the vehicles at or under cost for the existing reservation holders, believed to be around 30,000.

 
 
 
 
 

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