Rivian has agreed to pay $250 million to settle a class-action shareholder lawsuit filed against the company over the R1 pickup truck and SUV in 2022.
The lawsuit alleges Rivian included regular statements and figures in the run-up to the 2021 IPO about the costs needed to build the EVS R1. Despite the payment, Rivian said in A press release If it “denies the allegations in the suit and maintains this agreement to resolve any wrongdoing or wrongdoing.”
The payment still needs to be approved by a judge in the US District Court for the Middle District of California. If that happens, Rivian plans to pay a total of $67 million of the total settlement through the officers’ liability insurance, and the remaining $183 million from cash reserves. The company has $4.8 billion in cash (and equity) On June 30thSee rank-.
The settlement comes at a pivotal time for Rivian. The company is deep in preparations to launch the second eV, in 2026. The vehicle is cheaper than the R1 lineup – and Rivia plans to have more. The company is able to build about 150,000 per year at its plant in Illinois, and is also building a new plant in Georgia that will produce R2 and future vehicles.
At the same time, Sales R1 has been lagging. The company expects to complete 2025 after delivering less than 2024 or 2023. The combination of President Trump’s tariffs and the loss of the Federal Tax credit have been very complicated for Rivian vehicles.
To that end, this week the company laid off more than 600 employees with a restructuring that also saw CEO RJ Scaringe took over as interim marketing officerSee rank-.
Rivian will deliver the first R1 option truck at the end of 2021. In March 2022, the company decided to reach the price of trucks and SUVs by almost 20%lack of chain ideals, inflation, and plans to introduce cheaper models. (Rivian starts the R1S SUV MRS in August 2022.) The company applies price increases to new orders and to those who have already placed an order and are on the waiting list.
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Customers and fans of the company became irate, and rivian quickly reverse the decision for customers with prioritySee rank-. In essence, the price doubling announcement also sank Rivian’s stock price, causing losses for shareholders.
“You were wrong and we broke your trust in Rivian,” Fringe wrote in a letter at the time. “I have made many mistakes since starting Rivian more than 12 years ago, but this has been the most painful.”
Segeleholder Rivian Shareholder Charles Crews company support Only a few days later, it claimed, among other things, that the company did not disclose the true cost of the R1 building in the IPO documentation. The blame, he argued, caused the negative impact of the price invitation on the stock price. The lawsuit was granted class action status in July 2024.