Rivian has agreed to settle a 2022 shareholder lawsuit. The automaker will pay out $250 million to qualifying traders if the settlement is authorised. The lawsuit stemmed from alleged deception surrounding a March 2022 value hike for the R1S SUV and R1T truck.
The class-action lawsuit alleges that Rivian misled traders across the time of its 2021 IPO. The core accusation is that the automaker did not disclose that the R1s and R1T have been initially priced decrease than their manufacturing prices. Shareholders declare this made the eventual value will increase inevitable, one thing they (understandably) imagine Rivian ought to have shared.
Rivian raised the bottom value of the R1S and R1T by $12,000 in March 2022. That initially included most reservations. However, the corporate rapidly reversed course on the final bit: Following a backlash, it allowed clients who pre-ordered earlier than the announcement to pay the unique value in any case.
Rivian framed the settlement as an opportunity to maneuver ahead. “The firm denies the allegations within the swimsuit and maintains that this settlement to settle will not be an admission of fault or wrongdoing,” the automaker wrote in a assertion. “However, 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 for the Central District of California, Western Division, will nonetheless have to approve the settlement.
News of the proposed settlement comes a day after Reuters reported that Rivian is shedding 4.5 % of its workforce (over 600 staff). Last month’s expiration of $7,500 tax credit and President Trump’s tariffs, mixed with weakened EV demand, are making profitability extra of an uphill climb.