Rivian Drops Cheapest Versions of Its Electric Truck and SUV Models

“We realize this news comes as a surprise and apologize to customers who have had their planning impacted,” the company said.

Rivian Chief Executive

RJ Scaringe

has sought to simplify the array of vehicle options the company initially offered, in an effort to increase production numbers. A Rivian executive, speaking on a podcast, said discontinuing the low-price packaging options would allow it to manufacture more vehicles quickly.

This is the second time that Rivian has adjusted prices for its vehicles as it confronts rising raw material costs, particularly for batteries, and production woes that have led the company to report a $1.7 billion loss for the second quarter.

The California-based auto manufacturer is slashing costs to conserve cash and prioritizing certain trims of its vehicles. Rivian said it aims to produce 25,000 vehicles this year from its plant in Normal, Ill.

Rivian isn’t the only EV company raising prices as a result of rising materials and production costs. Both

Tesla Inc.

and Lucid Group Inc., two rival electric-vehicle makers, have hiked prices this year. The average transaction price for an EV in the U.S. was over $66,000 in July, around $20,000 more than the average gasoline-powered vehicle, according to car-shopping website Kelley Blue Book.

The higher price point presents a particular challenge for Rivian, with lawmakers proposing changes to a federal tax credit for EV buyers that would set a cap for qualifying models. Any electric truck or SUV selling for over $80,000 would become ineligible for the $7,500 tax credit under the planned revisions. Rivian has said that most of its vehicles would no longer qualify as a result.