On the Dash:
- Rivian will pay $250 million to settle investor claims over alleged IPO misrepresentation.
- The company is cutting more than 600 jobs to reduce costs and stabilize operations.
- Rivian is prioritizing the launch of its lower-cost R2 SUV as it navigates a cooling EV market.
Rivian will pay $250 million to settle a 2022 class-action lawsuit accusing the electric vehicle maker of misleading investors about vehicle pricing during its 2021 initial public offering, according to a recent court filing. The settlement, which the company says is not an admission of wrongdoing, resolves claims that Rivian concealed underpriced vehicle models ahead of the IPO, leading to unpopular price increases months later.
The lawsuit followed Rivian’s March 2022 announcement that it would raise the prices of its R1S SUV from $70,000 to $84,500 and its R1T pickup from $67,500 to $79,500. The price hikes prompted customer backlash and a 39% drop in Rivian’s share price over 10 days. The $250 million agreement provides compensation to certain shareholders who alleged that the company’s pricing strategy inflated expectations before the stock’s public debut.
Rivian plans to move forward and focus on launching its next-generation R2 SUV in 2026. The smaller, more affordable model is expected to play a key role in the automaker’s growth strategy as it seeks to expand its market reach and stabilize financial performance amid cooling U.S. demand for electric vehicles.
The company is under increasing pressure to control expenses while navigating a challenging EV market. Rivian has announced plans to reduce its workforce by 4.5%, or more than 600 employees, as part of a broader cost-cutting effort. The automaker has also faced challenges from rising tariffs on imported auto parts and a slowdown in EV sales following the expiration of a key federal tax credit.
Lawyers representing the plaintiffs described the settlement as a significant recovery for investors compared with the potential damages that could have been awarded had the case gone to trial. With the lawsuit behind it, Rivian is now turning its attention to the R2 rollout, which industry analysts view as crucial to the company’s long-term survival.
