Rivian Goes To Court Over Supply Chain Issues

Electric Vehicles / 5 Comments

Those Amazon delivery vans might be showing up a little late.

Rivian has had some serious supply issues in the last few months. CEO RJ Scaringe has even accused distributors of favoritism, giving semiconductors to more trusted, established automakers instead of his own young company. Now, the brand is taking it a step further, suing one of the suppliers that Rivian is using to fulfill its contract to build Amazon's electric delivery vans. Amazon also owns a 20% stake in Rivian.

Rivian filed a suit in March against Commercial Vehicle Group. Rivian's lawyers allege the brand has violated the supply contracts that were initially penned for the delivery van's seats. Rivian says the supplier has nearly doubled the initial agreed-upon price.

The supplier, Commercial Vehicle Group, of course, has denied these claims. Instead, it said in court filings that it wasn't contractually bound to a lower price.

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Instead, CVG says that it raised the price only after Rivian submitted several new engineering and design changes for the seats. As for who's actually telling the truth, it's hard to tell, and more for the courts to decide than us.

Rivian said in its suit that there isn't another supplier for these custom seats, which is obviously part of the issue here. With no one to turn to and funds low after a huge plummet in share value, Rivian is in a bind. The EV automaker has said it could take another year at least to find a new supplier. That will seriously affect the number of units Rivian said it could deliver, which it has now cut down to 25,000 Rivian R1T trucks and Amazon delivery vans. Without the seats, Rivian says it'll have to shut production on the van down until a new supplier is found.

Amazon
Amazon
Amazon
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These vans are all part of a massive order from Amazon, 100,000 of which Rivian has said it would make by 2025. However, it appears the two brands are working on a solution outside the courts. Both brands issued a statement that said they were going to continue to work together, including seat deliveries, until a resolution could be found.

That comes after court filings show a granted emergency order, which states that while the two parties litigate, CVG must continue to provide the seats at the agreed-upon price. While some units have been delivered, per Scaringe, Rivian is still on the hook for now. If a solution can't be found, we imagine Amazon will be the next company selling shares of Rivian.

Amazon
Amazon
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