Rivian Drives Against EV Tide As CEO RJ Scaringe Says Price Hikes More Likely

Benzinga · 05/11/2023 05:35

Electric vehicle startup Rivian Automotive, Inc. (NASDAQ:RIVN) recently reported first-quarter results that exceeded expectations and also maintained its production guidance for the year.

CEO R.J. Scaringe recently suggested that the company might not tow in line with the rest of its peers in aggressively cutting prices.

What Happened: "We see demand from customers for what we're building," Scaringe reportedly said in an interview with Reuters. The executive suggested upward movement in prices is likely.

"Given the data that we have on customer behavior, the aggregate result we see is a continued upward shift in ASPs," he reportedly said. He, however, left open the possibility of low-end models in the future.

"We will offer a lower priced variant, but not necessarily lower prices on the things we’re offering today," Scaringe said.

See Also: Best Electric Vehicle Stocks

Why It’s Important: Rivian's R1T pickup truck has a starting price of $73,000, while Ford Motor Co.'s (NYSE:F) rival offering – the F-150 Lightning truck, starts at $59.974. The R1S from Rivian's stable sells at $78,000, notably higher than the pricing of Tesla, Inc.'s (NASDAQ:TSLA) Model Y SUV.

Scaringe also explained the logic behind the strategy. "These are the products that are building our brand. They’re not meant to sell hundreds of thousands of units," he said.

The CEO said better performance and premium features of Rivian’s EVs will likely justify the premium pricing.

As startups slash prices to push volumes, the margins of these companies take a big hit, endangering their liquidity position and ability to remain a going concern.

In premarket trading on Thursday, Rivian shares rose 0.85% to $14.23, according to Benzinga Pro data.

Check out more of Benzinga’s Future Of Mobility coverage by following this link.

Related Link: As Rivian And Lucid Struggle, Elon Musk Says Volume Production, Achieving Positive Cash Flow Are ‘Insanely Hard’

Photo via Richard Truesdell on Wikimedia