Rivian Automotive (NASDAQ: RIVN) announced a price hike last Tuesday that retroactively applied to pre-orders as well, which would have required customers to pay the remaining difference.
The price hike sent share prices downward as customers voiced their displeasure, and investors balked at the severe misstep. Throughout the week, irate Rivian customers took to social media to vent their frustrations and announce the cancellation of their order. Some also claim to have offloaded Rivian shares after the announcement.
By Thursday, however, the company reversed course on its attempt to raise prices retroactively.
"Earlier this week, we announced pricing increases that broke the trust we have worked to build with you," Rivian CEO RJ Scaringe wrote in a letter to shareholders and customers. "Since originally setting our pricing structure, and most especially in recent months, a lot has changed. The costs of the components and materials that go into building our vehicles have risen considerably. As we worked to update pricing to reflect these cost increases, we wrongly decided to make these changes apply to all future deliveries, including pre-existing configured pre-orders."
According to Rivian, prices will still be rising for future orders made after the original announcement. Customers who had pre-ordered will still receive their vehicle at the original price. The company also noted that it would allow customers who canceled their orders to reinstate their order with their original price and delivery date.
However, the reversal wasn't enough for the EV maker to avoid a price target cut. Baird & Co reduced its price target for Rivian to $100 from $150. Baird still regards the stock as a buy, taking note of inflation and supply chain issues but saying that it had "full confidence" in the company.
In all, Rivian shares ended the week having lost just under a quarter of their value. The company might recover some of that lost value if it can deliver strong fourth quarter results, which are slated for release on Thursday. Rivian's Q3 was marked by weaker results than expected.