Rivian agrees to settle shareholder lawsuit for $250 million

Rivian has agreed to settle a 2022 shareholder lawsuit. The automaker will pay out $250 million to qualifying buyers if the settlement is permitted. The lawsuit stemmed from alleged deception surrounding a March 2022 price hike for the R1S SUV and R1T truck.

The category-action lawsuit alleges that Rivian misled buyers across the time of its 2021 IPO. The core accusation is that the automaker didn’t disclose that the R1s and R1T have been initially priced decrease than their manufacturing prices. Shareholders declare this made the eventual worth will increase inevitable, one thing they (understandably) consider Rivian ought to have shared.

Rivian raised the base price of the R1S and R1T by $12,000 in March 2022. That originally included most reservations. Nonetheless, the corporate quickly reversed course on the final bit: Following a backlash, it allowed clients who pre-ordered earlier than the announcement to pay the unique worth in any case.

Rivian framed the settlement as an opportunity to maneuver ahead. “The corporate denies the allegations within the swimsuit and maintains that this settlement to settle is just not an admission of fault or wrongdoing,” the automaker wrote in a statement. “Nonetheless, settling will allow Rivian to focus its assets on the launch of its mass market R2 car within the first half of 2026.”

The US District Court docket for the Central District of California, Western Division, will nonetheless must approve the settlement.

Information of the proposed settlement comes a day after Reuters reported that Rivian is shedding 4.5 p.c of its workforce (over 600 employees). Final month’s expiration of $7,500 tax credits and President Trump’s tariffs, mixed with weakened EV demand, are making profitability extra of an uphill climb.