One of Rivian's shareholders has just filed a lawsuit against the company due to its sudden decision to raise electric pickup and SUV prices. As per the lawsuit, no potential damages were disclosed regarding the increase in price.
Rivian is Being Sued by One of Its Shareholders for Failure to Disclose Price Hike
Initially reported by Protocol, Rivian is being sued by one of its shareholders for the sudden decision to raise prices. As per the lawsuit, the allegation is that no disclosure was given by the company informing shareholders that its vehicles would incur a massive $12,000 price hike.
There was also no disclosure of the potential damages that the rise in base price could bring. The shareholder is now seeking to launch a "class-action" status for the particular move that Rivian made.
Company Decided to Move New Price Deadline to March 1
According to the story by Engadget, the company revealed on March 1 that they would be increasing prices and the only people that were safe were those that placed in the earliest orders and those that had been able to reserve their units.
After the sudden price increase, the company gave buyers a solution which was to opt to purchase the R1T and R1S EVs starting at $67,500 and $72,500, respectively. The huge problem, however, is that the vehicles will come with a smaller standard battery and lesser range.
Rivian CEO Issues Apology Regarding Price Hike
To top it off, the proposed solution won't be available until 2024. Just two days after the lawsuit was launched, Rivian decided to reverse the price increase, saying that those that were able to put in reservations before March 1 won't have to pay the hiked prices.
Aside from the longer period, the company also said that those that had decided to cancel their orders due to the increase can still place them again with the original price before the increase. On top of everything, RJ Scaringe, Rivian's CEO, also issued an apology.
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Amazon Owns 22% of Rivian
The CEO admitted that what he did was a mistake and shared that he was truly sorry and is now committed to rebuilding the public's trust. With that, Rivian is no small company as it has started to turn heads with its fast and aggressive approach to EVs.
The company was able to swoop a massive 10.7 billion funding coming from different investors, including both Amazon and Ford. As per an article by TechCrunch, Amazon actually owns 22% of Rivian due to its $5 billion-plus, another $200 million purchase of stock.
Instead of a SPAC merger, however, the company decided to go public through a regular IPO. As per CNBC, the company had a "blockbuster debut" with a massive initial valuation reaching $86 billion.
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This article is owned by Tech Times
Written by Urian B.
