Rivian Shoots Self in Foot

Aptera Community Aptera Discussions Rivian Shoots Self in Foot

Aptera Community Aptera Discussions Rivian Shoots Self in Foot

  • Rivian Shoots Self in Foot

     Russell Fauver updated 4 months ago 11 Members · 22 Posts
  • Joshua Rosen

    Member
    March 2, 2022 at 5:40 pm

    This has come up on another thread but I think it deserves a thread of it’s own. Rivian has just sent out an e-mail to there reservation holders announcing a massive price increase, as much as $20,000 which to put that in perspective is as much as a base Ford Maverick and almost as much as the base Aptera at it’s current price. Rivian reservation holders paid a $1000 reservation fee which from a psychological point of view makes it seem very different that Aptera’s $100 fee. Aptera’s fee is enough to signal that your interest is genuine but it’s not so much that it feels like a contract. Rivian’s $1000 fee feels more like a down payment, from a legal point of view it’s no different but from the reservation holders point of view it’s very different. The Electrek article that I’m linking below indicates that half of Rivian reservation holders are dropping their reservations, I’m surprised that it’s not higher. Rivian may have torpedoed their chance at long term success, they have serious competition now in the Ford Lightning and the electric Chevy Silverado. The customers who walk away aren’t coming back.

    I’ve always expected the final Aptera price to be different from the reservation price but I’ve also expected the price increase to be reasonable. If Aptera were to increase the price by the magnitude that Rivian has I probably won’t go ahead with the purchase. I’m not sure what the exact number would be, I’m pretty sure that I’d be OK with several thousand dollars and very much not OK with $10,000.

    How about the rest of you. How much of a price increase, if any, would you tollerate?

    Rivian buyers are canceling at alarming rates after price increases

  • Lou Verner

    Member
    March 2, 2022 at 6:14 pm

    Yup, Rivian stock dropped over 8 points today reflecting this huge announced (27%) price increase. A similar increase in a $32K Aptera would equate to an $8600 jump. No doubt that would bump off s good number of reservation holders. Personally I think a $5-6K increase in my $37K reservation might be the break point, but I would reserve final judgment until after my intended extensive test drive. $43K still would be tolerable if the $7500 tax rebate kicks in. Don’t think I’d be able to switch to any other EV in that price range with anywhere near Aptera’s efficiency and other unique appealing qualities.

  • Byron Dieckman

    Member
    March 2, 2022 at 6:14 pm

    IMHO, Aptera will meet the issue squarely to build the most efficient vehicle possible with an eye to economy. If that translates ultimately to fewer unneeded amenities to keep the vehicle affordable then, that’s the decision most of us will face. We should be thankful for access to something that may positively alter public awareness, and put a spotlight on costly EV’s rising dependence on sparse power stations, and the grid. It’s just the beginning of real potential for the future of transportation for the average working stiff…. I hope.

  • Raj Giandeep

    Member
    March 2, 2022 at 6:39 pm

    I don’t see Aptera bumping the price that much if they do at all. Their vehicle is far more simple in it’s construction compared to Rivian.

  • V Pilot

    Member
    March 2, 2022 at 6:43 pm

    Mine’s optioned at $36,500, and I won’t go more than $40k. I paid less than $20k for my crew cab 4×4 Frontier long bed in ’09. It was 1 year old and at a Toyota dealer – they wanted it gone!

    • Steven G. Bueche

      Member
      March 3, 2022 at 4:09 am

      V Pilot, at 40K you’re close to the price of the Model 3

    • John Malcom

      Member
      March 3, 2022 at 8:44 am

      This great, but unfortunately another era. You would pay a premium for it now, maybe more than you paid for it. Glad you beat the market.

  • John Malcom

    Member
    March 2, 2022 at 7:10 pm

    I don’t know how to respond to this as I have mixed feelings about it.

    In our system, companies, for the most part, are not subsidized extensively by the government or are not a government entity like many places I have lived overseas. Their survival is based at a minimum on covering their operating expenses. If those expenses go up they need to increase their prices or take losses and eventually go out of business. Usually these increases result in the loss of customers or potential customers. I think this dynamic is OK as it is a part of the system we endorse. If, we as individuals want something but can’t afford it we generally don’t buy it especially if the price goes up rapidly and a lot. The combination of both of the above often results in the company going out of business and/or people trying to live above their means and ending in bankruptcies.

    I will not blame Aptera for raising their prices to cover supply and operating expenses. Like Lou we will evaluate the Aptera value proposition as it relates to our circumstances and set a threshold that if exceeded, will result in a non purchase.

    I hope the planets align for both us and Aptera where Aptera stays in business and we can afford our vehicles

    I am not ready to say the sky is falling yet and will not base my assessment on what is happening at an EV pickup startup. Aptera has pulled a rabbit out of a hat before and I trust they can do it again

    • GLENN ZAJIC

      Member
      March 2, 2022 at 10:56 pm

      I also have mixed feelings about it. This vehicle was designed to be easy to build with sparse extras other than great technology. I believe they can pull it off without much, if any, of an early increase in price. I know things have gone up over the last few years but I think they need to absorb some of that increase. When they get to the build they can make it up in volume. When they get that volume they can add more expensive models and greater options on the original. Some technologies will become less expensive as time, volume and experience in manufacturing take place. As a investor I do want them to be profitable, but reasonably so. I want this technology to pave the future and if the entry vehicle is priced too high it will exclude too many people.

      If I correctly interpreted your last sentence, they could raise it a Tweety bit but not more than a hare. I would agree with that.

      • John Malcom

        Member
        March 3, 2022 at 6:37 am

        Correct interpretation!

        Agree with the points you made as well

  • David Marlow

    Member
    March 3, 2022 at 2:09 am

    As long as the net price is about what we are now being quoted, after the tax credit and local sales tax is added, I will be OK with the price.

    • Steven G. Bueche

      Member
      March 3, 2022 at 4:08 am

      David, don’t forget the current Tax Credit is not a ‘Point of Sale’ credit. You wont be getting $7,500 off your price tag. You’ll only benefit if you owe taxes on your return. So if you owe $2,000 in taxes you’ll only get to reduce that tax amount by $2,000 which cleans your slate. It still has no effect on the price of your car.

      I went for the Aptera because of the style and the price. I’d heard in somewhere that they had more than a 30% profit margin on each car which is healthy. I’ll stick with my basic version to keep my price point but only because I’m not a bells and whistles type of guy.

      • Raj Giandeep

        Member
        March 3, 2022 at 4:40 am

        During one of the ambassador calls, they have somebody helping helping with getting the 3 wheel EV tax credit into the bill. He mentioned you can apply the tax credit to Aptera as a company at the point of sale instead of yourself & get $7500 off a point of sale. At least that was my understanding.

        • Joshua Rosen

          Member
          March 3, 2022 at 4:48 am

          The new tax credit was part of BBB which is dead. No one should assume the tax credit law will change. Aptera is an autocycle not a car so it only qualifies for a $2500 credit under the current law. There may be state credits available depending on your state.

        • John Malcom

          Member
          March 3, 2022 at 8:42 am

          Chance of that happening and passing very, very, very low now. After midterms dead all together. We will have to plan for our purchases for what is available now and hope for very small price increase if Aptera feels the need.

      • John Malcom

        Member
        March 3, 2022 at 8:55 am

        A 30% net profit margin is almost impossible to achieve by any car maker. The operative word here is achieve, not plan for or price for. Currently the net profit leader is Porsche at around 20%. Premium brands generally make the largest margins even though they are low production volume vehicles. The average net profit for major car manufacturers for the five-year period ending in 2020 was 7.5% with an average of 5% on new car models. The first half of 2021 is an exception with new car margins for manufacturers around 10% double the average!

        I am most familiar with the GM manufacturer and specifically their EV group. GM has priced some of their electric vehicles at a loss to undercut competitors and gain market share. (Volt and Bolt) They may do this with their non premium offerings, even the new ones with a desirable form factor in the next 18 months.

        The rest of these things I think everyone knows almost intuitively.

        Start ups have a difficult time with margin because they don’t have a lot of capital to competitively price their vehicles to enter a market nor do they initially have a volume that would allow them to make a profit with a low margin. Also, they need to amortize their R&D and startup costs in their early pricing across some release period of some number of years. If they have institutional investors (Venture Capital firms) these investors press for higher prices to achieve profit right away.

        Aptera has an almost nontraditional manufacturing process yet to be exercised so it is difficult for both them and us to assess how well it will work. Sandy Munro designed the Dodge Viper assembly process. It is very similar to Aptera, mostly manual for low volume production. They manufacture the engine in the line as well. It is interesting to see their process in action. There is a good YouTube narrated video here that shows that process. May be of interest as it may help us understand what Aptera will eventually implement.

        https://www.youtube.com/watch?v=xMmaPr7L4dU

        Of course, even the perceived as best (Tesla, Lucid, GM, etc.) have/had difficulties getting production working efficiently with vehicle defects, recalls, and in the case of GM massive battery issues. That kind of thing is hard to account/compensate for in pricing if you are a startup and can be catastrophic if it happens. Hopefully, Aptera will have only minor problems fixed quickly and cheaply. My experience says that is the point most vulnerable for failure four a lighly funded auto starts up. Make no mistake there will be hiccups in Aptera manufacturing when it starts ramping up.

        However, despite the above, I don’t think the sky will fall. In my many gray beard years of experience, Aptera’s approach to integrated engineering focusing on simplification Contributes to reliability), design for easy manufacturing, and designing so an owner can repair will preclude many or most of the thorns waiting to catch them.

        I admire the Managers and engineers of Aptera so much, more so than any other company in any domain I have knowledge of and congratulate them on their miraculous accomplishments to date. I have a strong level of assurance that they will find a solution to get Aptera into and successful in the market and fairly priced vehicles in our driveways

        For me, this is a substantive complement and expression of confidence from someone that for the last 20 years has been draconian on efficiency and defect free processes and products because of my Six Sigma Practice.

        • Jon Arryn

          Member
          March 3, 2022 at 9:15 am

          Hiccups for sure. We were supposed to have 6-12 betas by the end of last year. We have one; it’s now March 2022; there’s still only one. If you recall, from the Spring 2021 update, production was “on track” for Fall 2021. Supply constraints aside, the vehicle, in current state, is nowhere near production-ready.

          • This reply was modified 4 months ago by  Jon Arryn.
  • Jon Arryn

    Member
    March 3, 2022 at 7:41 am

    For me, maybe absorb a 10% increase. As currently configured, I’m factoring in a BBB-like POS purchase credit of $7,500. If a bill does not come about and/or a price increase, I’m more likely to down-spec, rather than cancel outright.

  • Joshua Rosen

    Member
    March 3, 2022 at 8:05 am
    • John Malcom

      Member
      March 3, 2022 at 9:39 am

      Thanks for this Doctor Rosen. Hard to eat humble pie to the tune of $840 million. But, the right thing to do and they have the capital to do it

    • Jon Arryn

      Member
      March 3, 2022 at 10:00 am

      Blerg

  • Russell Fauver

    Member
    March 3, 2022 at 10:49 am

    Regarding any price increase, I’m okay with aptera keeping up with the rate of inflation. A thousand dollars today will not get you the same things that it would back when Aptera first announced their pricing. If their team can cut costs enough to maintain their original price point then all the better.

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