Rivian is facing a shareholder lawsuit after raising the price of its electric pickup and SUV and subsequently reversing course, Protocol has reported. The action alleges that Rivian failed to disclose that it would hike the base price of its vehicles by around $12,000, nor the potential damages that would cause. An individual shareholder brought the complaint, but is seeking class-action status.
On March 1st, Rivian unveiled the higher pricing that applied to everyone except those who placed the earliest orders, including most reservation holders. The company did give potential buyers another option, as it also introduced dual-motor versions of the R1T and R1S EVs, with both starting at the original $67,500 and $72,500 prices. However, neither of those vehicles will be available until 2024, and both will have smaller “standard” battery packs that deliver less range than the large packs (260 instead of 310 miles).
Two days later, the company reversed the price increases. Anyone who reserved before March 1st will pay the original price, and those who cancelled because of the increase can reinstate their orders with the same price and delivery date. The company’s CEO RJ Scaringe also apologized. “I have made a lot of mistakes since starting Rivian more than 12 years ago, but this one has been the most painful,” he said. “I am truly sorry and committed to rebuilding your trust.”
Rivian gained a massive $10.7 billion in funding with investors including Ford and Amazon, which owns the largest stake (22 percent). The company went public via a regular IPO and not a SPAC merger. It had a “blockbuster debut,” according to CNBC, with an initial valuation of $86 billion. Early reviews of the R1T electric pickup, including by Engadget, have been positive.