Rivian has confirmed that it will not join Tesla in its recent price-cutting frenzy. Despite Tesla’s moves to reduce prices across its range, Scaringe stated that Rivian will not follow suit. He attributed the decision to the company’s robust order backlog, with demand expected to remain high through 2024.
Scaringe spoke about the company’s pricing strategy during the recent Rivian fourth-quarter earnings call, stating that the vehicles they offer provide significant value for their current price levels. “We feel confident in the value proposition of what we’re delivering at our pricing levels today,” Scaringe said.
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Although Rivian did not provide an exact number for its order backlog, the company previously reported 114,000 preorders for the R1T pickup and R1S SUV in the US and Canada. Additionally, the automaker has a long-term order from Amazon for 100,000 EDV delivery vans, which are set to be delivered by 2030.
Scaringe also noted that Tesla’s recent price cuts targeted lower-priced segments where Rivian does not yet compete. He added that the Rivian R1S and R1T do not have any direct rivals among Tesla’s current offerings.
Despite the robust demand, Rivian reported a fourth-quarter net loss of $1.7 billion. However, the company remains well-funded, with cash and cash equivalents of $11.6 billion. Rivian expects to produce 50,000 vehicles in 2023, including the R1S, R1T, and EDV van. This output is lower than analyst expectations, with supply chain issues cited as a factor limiting production at its Normal, Illinois plant.
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While some may see Rivian’s decision not to engage in a price war as a missed opportunity, Scaringe’s confidence in the value proposition of the company’s offerings suggests that it is a calculated decision based on their strong order backlog. As the EV market continues to grow, it will be interesting to see how Rivian’s strategy evolves and how it competes with other players in the industry.
