Rivian Automotive Inc (NASDAQ:RIVN) has agreed to pay $250 million to settle a securities class-action lawsuit filed in 2022 over disclosures related to its 2021 initial public offering (IPO) and subsequent vehicle pricing.
The litigation, filed in the US District Court for the Central District of California, alleged that Rivian’s IPO disclosures and certain statements made during a December 17, 2021, earnings call and SEC filing were materially false or misleading.
The plaintiffs claimed the company failed to disclose that the bill of materials costs for its R1S SUVs and R1T trucks significantly exceeded the sales prices at which the vehicles were offered, prompting Rivian to raise retail prices.
Rivian has rejected the claims and said that the settlement does not constitute an admission of fault or wrongdoing.
“The company denies the allegations in the suit and maintains that this agreement to settle is not an admission of fault or wrongdoing. However, 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 a statement.
Under the proposed settlement, which is subject to court approval, Rivian will pay $250 million to resolve claims brought on behalf of purchasers of the company’s Class A common stock between November 10, 2021, and March 10, 2022.
The payment will be funded by $67 million from directors’ and officers’ liability insurance and $183 million from the company’s cash reserves.
If approved, the settlement would resolve all claims against Rivian and the other named defendants.
Rivian has recently undergone workforce reductions and operational restructuring amid competitive pressures, tariffs, and the expiration of the federal EV tax credit.
The company’s shares traded flat at $13 on Friday afternoon, down about 1.3% this year.