Electric vehicle maker Rivian has agreed to pay $250 million to settle a class-action lawsuit from 2022. The lawsuit accused Rivian of misleading shareholders by hiding the fact that it initially underpriced its vehicles around the time it went public in 2021. Investors said the company’s later price hikes caught customers and the market off guard.
The controversy erupted in March 2022 when Rivian raised the price of its R1S SUV from $70,000 to $84,500 and the R1T pickup from $67,500 to $79,500. This led to a 39% drop in Rivian’s stock over just ten days, frustrating many buyers who voiced their concerns on social media and beyond.
While Rivian denies any wrongdoing, it chose to settle to move forward. The company stated the settlement is not an admission of fault and aims to clear the way for its future plans. Rivian is preparing to launch a smaller, more affordable R2 SUV next year, which it sees as key to expanding its market share—especially with U.S. electric vehicle demand expected to fall after a recent tax credit expired.
The stakes are high for Rivian. The company is working to reduce costs amid challenges like tariffs on imported auto parts and a general slowdown in electric vehicle sales. Recently, it announced layoffs affecting about 4.5% of its workforce, roughly 600 employees.
Plaintiffs’ lawyers noted the $250 million settlement represents a significant part of the damages they hoped to claim. Meanwhile, Rivian wants to focus on the future, using the deal as a fresh start while it races to make its next vehicle a hit with drivers.
This settlement could give Rivian some breathing room at a critical moment as it fights to build a stronger foothold in the competitive EV market.