Rivian said on late Thursday it has agreed to pay $250 million to settle a securities class action lawsuit filed in 2022, resolving claims that the EV maker misled investors around the time of its initial public offering.
The plaintiffs claimed that Rivian’s IPO offering documents and subsequent statements to investors — including remarks made during an earnings call and filings with the SEC on December 16, 2021 — contained materially false and misleading statements.
They alleged 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.
The Irvine, California-based company said Thursday the agreement, which remains subject to approval by the US District Court for the Central District of California, will fully resolve all claims.
The claims were brought on behalf of purchasers of Rivian’s Class A common stock between Nov. 10, 2021, and Mar. 10, 2022.
The company founded and led by RJ Scaringe 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 the decision to settle will allow it to focus its resources on the launch of its mass-market R2 vehicle, which is expected in the first half of 2026.
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.
If approved, the settlement would end litigation.
“Settling will enable Rivian to focus its resources on the launch of its mass market R2 vehicle in the first half of 2026,” the company said in the statement.
Earlier on Thursday, the EV maker said it was laying off more than 600 employees, affecting about 4.5% of its workforce.
After reaffirming its annual guidance of 40,000 to 46,000 vehicles in mid-September, Rivian readjusted it to between 41,500 and 43,500 units — raising demand concerns among investors.
