"Rivian has agreed to pay $250 million to settle a class-action shareholder lawsuit filed after the company suddenly hiked prices on its R1 pickup truck and SUV in 2022. The lawsuit alleged Rivian had included misleading statements and figures in regulatory filings in the run-up to its 2021 IPO about the costs required to build the R1 EVs."
"Despite agreeing to the payment, Rivian said in a press release that it "denies the allegations in the suit and maintains that this agreement to settle is not an admission of fault or wrongdoing." The payment still has to be approved by a judge in the U.S. District Court for the Central District of California."
"If that happens, Rivian plans to pay $67 million of the total settlement through its directors' and officers' liability insurance, and the remaining $183 million out of its cash reserves. The company had $4.8 billion in cash (and equivalents) as of June 30."
"The settlement comes at a pivotal time for Rivian. The company is deep in preparations to launch its second-generation EV, the R2 SUV, in 2026. That vehicle is much cheaper than the R1 lineup - and Rivian plans to make far more of them. The company says it can build as many as 150,000 per year at its factory in Illinois, and it's also building a new factory in Georgia that will produce the R2 and future vehicles."
"At the same time, R1 sales have been lagging. The company expects to finish 2025 having shipped far fewer EVs than it did in 2024 or 2023. A combination of President Trump's tariffs and the loss of the federal EV tax credit has further complicated the market for Rivian's vehicles. To that end, this week the company laid off more than 600 employees in a restructuring that also saw CEO RJ Scaringe take over as interim chief marketing officer."
Rivian agreed to a $250 million settlement of a class-action shareholder lawsuit tied to its sudden 2022 price increases on the R1 pickup and SUV and alleged misleading cost disclosures in pre-IPO filings. Rivian denies the allegations and says the settlement is not an admission of fault; the payment requires U.S. District Court approval. If approved, $67 million will come from directors' and officers' insurance and $183 million from cash reserves; the company held $4.8 billion in cash as of June 30. The settlement arrives while Rivian prepares the cheaper, higher-volume R2 SUV for 2026 amid lagging R1 sales, tariff impacts, loss of the federal EV tax credit, and a recent layoff of more than 600 employees with the CEO temporarily assuming CMO duties. Rivian delivered its first R1 pickups in late 2021 and increased R1 prices nearly 20% in March 2022, citing supply chain shortages and inflation.
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