Rivian Settles $250 Million Shareholder Lawsuit Over Price Hike Controversy

Rivian has agreed to pay $250 million to settle a class-action shareholder lawsuit stemming from a controversial price hike for its R1 pickup truck and R1S SUV in March 2022. The lawsuit, filed by shareholders, alleged that Rivian misled investors regarding the production costs of its electric vehicles (EVs) during its 2021 initial public offering (IPO). The settlement is pending approval from the U.S. District Court for the Central District of California.

EngadgetReutersRivian agrees to pay massive $250M lawsuit settlementTechCrunchRivian to Pay $250M to Settle 2022 Investor Lawsuit, Denies Wrongdoing

The lawsuit claimed that Rivian had failed to disclose that the production costs for the R1T and R1S exceeded their retail prices, which led to the eventual price increases. In March 2022, Rivian raised the base price of the R1T from $67,500 to $79,500 and the R1S from $70,000 to $84,500, a nearly 20% increase that applied to both new orders and pre-orders. This decision faced significant backlash from customers and investors, resulting in a 39% drop in Rivian's stock price over ten days following the announcement.

ReutersEngadgetRivian agrees to pay massive $250M lawsuit settlementTechCrunchRivian to Pay $250M to Settle 2022 Investor Lawsuit, Denies Wrongdoing

Rivian plans to fund the settlement through a combination of $67 million from its directors’ and officers’ liability insurance and $183 million from its cash reserves, which totaled $4.8 billion as of June 30, 2025. The company maintains that the settlement does not constitute an admission of fault or wrongdoing, stating, "Settling will enable Rivian to focus its resources on the launch of its mass market R2 vehicle in the first half of 2026."

Rivian agrees to pay massive $250M lawsuit settlement

The price hike and subsequent lawsuit have raised concerns among investors about Rivian's transparency and business practices. Critics argue that the company should have disclosed the true costs of production during its IPO, which would have provided a clearer picture of its financial health. The lawsuit received class-action status in July 2024, allowing it to represent multiple affected shareholders.

Rivian agrees to pay massive $250M lawsuit settlement

In conjunction with the settlement announcement, Rivian disclosed layoffs affecting over 600 employees, approximately 4.5% of its workforce, as part of a broader restructuring effort. CEO RJ Scaringe has taken on additional responsibilities as interim chief marketing officer during this transitional period. Rivian is preparing to launch its R2 SUV, which is expected to be more affordable and produced at a higher volume than the R1 lineup, with a manufacturing capacity of up to 150,000 units annually at its Illinois factory.

TechCrunch

• “The company denies the allegations in the suit and maintains that this agreement to settle is not an admission of fault or wrongdoing,” — Rivian

Engadget

• “However, settling will enable Rivian to focus its resources on the launch of its mass market R2 vehicle in the first half of 2026.” — Rivian

Engadget

The proposed settlement awaits judicial approval, which will allow Rivian to close this chapter of legal challenges and concentrate on its upcoming product launches and restructuring efforts. The outcome of the R2 SUV's market introduction will be critical for Rivian's future viability in the competitive EV landscape.

TechCrunch