Electric vehicle maker Rivian has agreed to a $250 million settlement with investors who accused it of misleading statements about vehicle pricing during its 2021 initial public offering. The company denies any wrongdoing but says the deal will allow it to concentrate on launching its mass-market R2 vehicle in 2026. The lawsuit stemmed from post-IPO price increases that erased a significant portion of Rivian's value.
Rivian announced the settlement on Thursday, October 24, 2025, resolving a lawsuit first filed by a shareholder in 2022. Investors claimed the startup knew its R1T electric truck and R1S electric SUV would cost far more to produce than the advertised prices of $67,500 and $70,000, respectively, and that a post-IPO price hike would damage its reputation and lead to cancellations among nearly 56,000 pre-orders.
Rivian's November 2021 IPO was followed just months later by a substantial price increase to $79,500 for the R1T and $84,500 for the R1S. Amid public outcry, Rivian honored the original prices for existing pre-orders but blamed "inflationary pressure" for the changes. The announcement triggered a sharp market reaction, with more than a third of the company's value erased in a few days, according to the lawsuit.
A former sales and marketing vice president, who left Rivian in late 2021 citing a "toxic bro culture," alleged in her own suit that management recognized the vehicles were underpriced and that each sale would result in a loss, necessitating price raises after the IPO. She stated, "it was clear that the vehicles were underpriced, and each sale would result in a loss for the company" and "they would need to raise the vehicle prices after the IPO."
Rivian maintains it made no "materially untrue" statements in its IPO materials. In a statement, the company said the $250 million payment "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."