Rivian has signed a $250 million IPO settlement over litigation involving its R1T pickup and R1S SUV. The EV maker clarified that the settlement is not an admission of guilt.
Rivian has agreed to pay a $250 million settlement for a securities class action lawsuit relating to its 2021 initial public offering (IPO). The case claimed that Rivian deceived its investors about production costs and profit margins for its first EV models, the R1T pickup and R1S SUV.
As a result, a case was filed in the U.S. District Court for the Central District of California in 2022. The settlement applies to individuals who purchased Rivian’s class A common stock between November 10, 2021, and March 10, 2022.
The Plaintiffs claimed that the American EV maker kept details of the bill of materials to itself. The cost of producing the EVs in question, the R1T pickup and R1S SUV, exceeded their selling prices. This led to post-IPO price hikes.
Although the company denied these allegations, it chose to settle to avoid prolonged litigation. According to the official statement Rivian released on the matter, the decision “is not an admission of fault or wrongdoing” but a necessary step to focus on “the launch of its mass-market R2 vehicle, expected in the first half of 2026.”
If the proposed deal gets court approval, $67 million of the payout will come from directors’ and officers’ liability insurance, with the remaining $183 million covered by Rivian’s cash reserves.
