Rivian’s road to redemption just got a little more expensive.

Fresh off of firing 600 more employees yesterday, the electric truck maker has agreed to pay $250 million to settle a class-action lawsuit alleging that it misled investors ahead of its blockbuster 2021 IPO. The case stemmed from Rivian’s controversial 20% price hike on its R1T pickup and R1S SUV in early 2022… a decision that briefly torched the company’s stock and its relationship with early customers.

The suit, led by shareholder Charles Larry Crews, accused Rivian of underestimating production costs in its regulatory filings and failing to warn investors that its flagship vehicles were far more expensive to build than disclosed. The price hike, announced just months after the IPO, was seen as the moment those miscalculations came home to roost.

Rivian has denied all wrongdoing. In a statement, the company said the settlement “is not an admission of fault or liability,” describing the deal as a move to “avoid the distraction and uncertainty of continued litigation.”

If approved by a federal judge in California, Rivian will fund the payout through a mix of insurance and cash. Roughly $67 million will come from directors’ and officers’ liability insurance, while the remaining $183 million will be drawn from Rivian’s own reserves… which stood at $4.8 billion as of June 30.

The settlement arrives as Rivian faces for a crucial year ahead. The company is overhauling operations and laying off more than 600 employees, with CEO RJ Scaringe personally stepping in as interim chief marketing officer. The automaker is also pushing forward with the R2 SUV, a mass-market model slated for 2026 that could make or break Rivian’s future. Priced well below the R1 line, the R2 is expected to roll out from both its Illinois factory and a new Georgia plant capable of producing 150,000 vehicles annually.

Meanwhile, R1 sales have slowed under the weight of Trump-era tariffs and the loss of federal EV tax credits… two policy shifts that have complicated the already competitive EV landscape.

Rivian’s 2022 price hike was meant to offset rising costs from supply chain constraints and inflation, but applying it to preorders backfired spectacularly. Customer outrage forced a swift reversal, with Scaringe later admitting, “It was wrong, and we broke your trust in Rivian.”

Still, the financial damage was done. The stock tumbled, investors revolted, and the lawsuit followed soon after. Now, nearly three years later, Rivian appears eager to close that chapter… even if it means writing a hefty check to do it.

Unfortunately, the $250 million payout won’t solve Rivian’s fundamental issue… scaling production without draining its balance sheet. Still, with legal distractions fading and a fresh vehicle launch on the horizon, the company may be inching closer to stability… if it can manage to stay liquid.

At the time of publishing this article, Stocks.News doesn’t hold positions in companies mentioned in the article.