Rivian investors who bought shares in the company’s first months of public trading face a looming deadline to file claims in a $250 million class action settlement.
The lawsuit — filed in 2022 — alleged that Rivian made materially misleading statements about vehicle production costs leading up to its initial public offering in November 2021.
The claims were brought on behalf of purchasers of Rivian’s Class A common stock between November 10, 2021, and March 10, 2022.
According to the plaintiffs, the company failed to disclose that the bill of materials cost for its R1T pickup and R1S SUV exceeded their retail prices, forcing Rivian to raise prices on those vehicles.
Last October, the EV maker agreed to pay $250 million to settle the securities class action lawsuit.
By then, Rivian reiterated that it “denies the allegations in the suit and maintains that this agreement to settle is not an admission of fault or wrongdoing.”
The company said its decision to settle would allow it to focus its resources on the launch of its mass-market R2 vehicle, it further stated.
Claims by April 20
Under the proposed terms, Rivian will pay the $250 million through a combination of $67 million from directors’ and officers’ liability insurance and $183 million in cash on hand.
The Court preliminarily approved the Settlement — which covers two groups of investors — dated December 18, 2025.
The first includes anyone who bought Rivian Class A common stock on the open market between November 11, 2021, and March 10, 2022 — but not those who purchased shares at the original IPO price of $78 per share on the first day of trading.
This group’s claims fall under the Securities Exchange Act of 1934, which covers fraud in the secondary market.
The second group is broader: it includes anyone who bought Rivian Class A shares between November 10, 2021 (the IPO date itself), and March 10, 2022, including IPO buyers.
These claims fall under the Securities Act of 1933, which governs misleading statements in IPO registration documents.
In practice, IPO-day buyers at the fixed offering price can only claim under the 1933 Act, while investors who bought shares on the open market after the IPO can potentially claim under both.
Anyone who falls into either group and suffered losses is eligible for a payout, provided they file a claim by April 20 — with objections to the settlement terms accepted through April 24.
May 15 Court Hearing
Judge Josephine L. Staton of the US District Court for the Central District of California is scheduled to hold a final approval hearing on May 15.
The court will review the settlement terms, any objections filed by class members, and the total number of claims received.
If the court finds that the $250 million figure is fair and reasonable relative to potential trial damages, final approval will be granted.
Class Counsel has requested attorneys’ fees of no more than 24% of the settlement fund, plus litigation expenses not exceeding $6.9 million. Administration costs are estimated between $1.6 million and $1.9 million.
After those deductions, the estimated payout drops from approximately $1.18 to roughly $0.85 per eligible share.
Payments would follow only after all claims processing is completed — a process that typically takes several additional months.
Judge Staton could approve the settlement but push back on certain terms — most commonly the attorneys’ fee request or the distribution plan.
Such adjustments would delay payouts but would not necessarily invalidate the agreement.
An outright rejection is unlikely, as plaintiffs and Class Counsel have described the settlement as “fair, reasonable, and adequate, and in the best interests of the Classes.”
Still, the judge retains full discretion to reject the agreement if she concludes the amount fails to adequately compensate investors relative to the roughly $12 billion Rivian raised through its IPO.
Objections
Class members have until April 24 to file objections, arguing the settlement is too low, the legal fees are too high, or the terms are otherwise unfair.
If the court receives a significant number of objections — or encounters particularly compelling arguments — the judge could delay approval or direct the parties to renegotiate.
This is uncommon for settlements of this size that have already cleared preliminary approval, but it remains a possibility.
The settlement administrator estimates a distribution of approximately $1.18 per affected share, subject to reductions for legal fees, taxes, and administrative expenses.
Opt-Outs
A number of institutional investors have already excluded themselves from the class, preserving the option to pursue separate claims.
Those who have opted out have been named in Appendix 1 of the settlement document; however, that appendix is not publicly available.
There is no further opt-out window, meaning the scope of the settlement is fixed.
Additionally, any independent litigation by those investors would not affect the outcome of the May hearing.
Financials
According to Forbes, Rivian raised about $10.5 billion in private funding from investors including Amazon, Ford and T. Rowe Price ahead of its 2021 initial public offering (IPO).
The company went public on November 10, 2021, and closed the first trading day at roughly $86 billion — the biggest US IPO since Facebook in 2012.
Its shares surged 29% on the first trading session, surpassing the market cap of both Detroit automakers General Motors and Ford then.
The stock reached a peak of $179.47 per share on November 16, 2021. Since then, it has lost over 90% of its value.
As of press time, the stock was trading 7% higher at $15.99 on Monday’s trading session — a gain that reflects a broader market rally following news related to the ongoing US–Iran conflict.
The Irvine EV maker’s cumulative cash burn has exceeded $24 billion by the end of 2025, as it reported an additional $2.5 billion in negative free cash flow last year.
Questioned about the cash burn rate recently, Scaringe said they “wouldn’t be building a business if we didn’t plan for the business to make money.”
In mid December, when asked whether Rivian would need to raise additional capital to reach profitability, Scaringe pointed to the company’s cash reserves, as previously referenced by Chief Financial Officer Claire McDonough.
Rivian revealed in a SEC filing last week that it no longer expects to be “adjusted EBITDA positive in 2027,” going back on a target its CFO had reiterated five weeks ago during the company’s quarterly earnings call.
