Rivian has agreed to pay $250 million to settle a category motion shareholder lawsuit filed after the corporate instantly hiked costs on its R1 pickup truck and SUV in 2022.

The lawsuit alleged Rivian had included deceptive statements and figures in regulatory filings within the run-up to its 2021 IPO concerning the prices required to construct the R1 EVs. Regardless of agreeing to the fee, Rivian stated in a press launch that it “denies the allegations within the go well with and maintains that this settlement to settle will not be an admission of fault or wrongdoing.”

The fee nonetheless must be accepted by a choose within the U.S. District Court docket for the Central District of California. If that occurs, Rivian plans to pay $67 million of the full settlement by means of its administrators’ and officers’ legal responsibility insurance coverage, and the remaining $183 million out of its money reserves. The corporate had $4.8 billion in money (and equivalents) as of June 30.

The settlement comes at a pivotal time for Rivian. The corporate is deep in preparations to launch its second-generation EV, the R2 SUV, in 2026. That car is less expensive than the R1 lineup — and Rivian plans to make way more of them. The corporate says it could construct as many as 150,000 per yr at its manufacturing unit in Illinois, and it’s additionally constructing a brand new manufacturing unit in Georgia that may produce the R2 and future automobiles.

On the similar time, R1 gross sales have been lagging. The corporate expects to complete 2025 having shipped far fewer EVs than it did in 2024 or 2023. A mix of President Trump’s tariffs and the lack of the federal EV tax credit score has additional sophisticated the marketplace for Rivian’s automobiles.

To that finish, this week the corporate laid off greater than 600 staff in a restructuring that additionally noticed CEO RJ Scaringe take over as interim chief advertising officer.

Rivian delivered the primary R1 pickup vehicles in late 2021. In March 2022, the corporate determined to hike the value of the truck and the SUV by almost 20%, citing provide chain shortages, inflation, and plans to introduce cheaper fashions. (Rivian started R1S SUV deliveries in August 2022.) The corporate utilized the value hike to each new orders and to those that had positioned preorders and have been on a waitlist.

Clients and followers of the corporate have been irate, and Rivian shortly reversed the choice for patrons with preorders. Crucially, the value hike announcement additionally sank Rivian’s inventory worth, inflicting losses for shareholders.

“It was improper and we broke your belief in Rivian,” Scaringe wrote in a letter on the time. “I’ve made plenty of errors since beginning Rivian greater than 12 years in the past, however this one has been probably the most painful.”

Rivian shareholder Charles Larry Crews sued the corporate just some days later, claiming, amongst different issues, that the corporate had misrepresented the true value of constructing the R1 automobiles in its IPO documentation. These misrepresentations, he argued, led to the value hike announcement’s unfavorable influence on the inventory worth. The lawsuit was granted class motion standing in July 2024.