What Does The Rivian Price Hike Mean For RIVN Stock? Time To Sell?

Trade Rivian Stock Your Capital Is At Risk
Ollie Martin
Updated: 3 Mar 2022

Key points:

  • Customers are left enfuriated after widespread pre-oder price hikes
  • Preorder numbers might be dubious following customer cancellations
  • Rivian amongst others need to navigate inflationary pressures without risking customers

Rivian (NASDAQ: RIVN) hasn’t earned itself the most reliable of reputations. Sure, stakes from Ford and Amazon allude to the company’s distinct personality and prominent positioning amongst the torrent of new EV companies; really though, Rivian is just another well-polished candidate from an SPAC merger.

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Despite the illusiveness and even deceptiveness of EV companies going public via SPACs, Rivian has still managed to win over the eager automobile industry, topping a $100B market cap late last year. 

In a serious blow to the company's reputation, Rivian customers were left in dismay after the company announced a number of price hikes across their vehicles. Now, this wouldn’t normally be much of a problem – unless the customers have already committed to buying the vehicles. Citing the changes as ‘minor adjustments’, Rivian has anchored on costs of up to $15,000 for parts that were previously free. 

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It’s no huge surprise that customers are kicking up a fuss, and it doesn’t look good for a company that is relying solely on maximizing preorders in order to remain competitive in a tightening market. All in all, the future for Rivian in the short-term looks incredibly bleak. The chances of the company hitting its required preorder goals are slimming fast, with profits tanking swiftly afterward. If it wasn’t hard enough for new EV companies to expand, such a blow to the public image is the last thing they need. 

Inflation and supply chain issues are likely to permeate throughout the automobile industry for the coming year, if not longer. If Rivian cannot navigate the landscape without sacrificing its customers, they don’t stand much of a chance in securing the market share needed to become the anticipated brand that is expected. RIVN stock unsurprisingly tanked more than 13% on the news, and in all likeliness will continue with the company’s upcoming earnings on March 10th. 

 

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