Electric-vehicle startup Rivian Automotive Inc. is suing a key supplier of seats,
Over pricing dispute that could impact production of an electric van ordered by Amazon.Inc.
Rivian, back in March sued the supplier, Commercial Vehicle Group Inc., accusing it of violating the supply contracts for seats by nearly doubling an initially agreed-upon price per unit, according to records filed with a Michigan court.
Commercial Vehicle Group, a publicly traded auto supplier, denies the claims, saying in court filings that it wasn’t contractually obligated to the lower price and raised it only after Rivian submitted multiple engineering and design changes.
Rivian specified in the lawsuit that there is no alternative supplier for the custom-designed seat packages for the electric van and it could take well over a year for it to find another vendor.
CEO RJ Scaringe tweet on Rivian production
Ramping production is hard but progress is rewarding. Appreciate the focus and commitment of our team and suppliers. pic.twitter.com/VbnboNJUyJ
— RJ Scaringe (@RJScaringe) May 19, 2022
Rivian warned that,
if Commercial Vehicle Group stopped delivering the seats, the EV maker would face an imminent shutdown of its van production
- Rivian has an order for 100,000 vans from Amazon, an early investor in the startup holding a roughly 19% stake.
In the lawsuit,
Rivian says the parts dispute would specifically affect production of the Amazon-Rivian Prime Van, or ‘RPV’ as it is known for short.
Rivian has said previously it aims to fill the 100,000 van order by 2025, describing Amazon as one of its largest customers.
In a joint statement, Rivian and Commercial Vehicle Group said the supplier has continued to provide seats to Rivian and the parties are discussing a resolution.
The legal confrontation could have broader implications for Rivian’s business, because Amazon is one of its largest initial customers and the company only last fall began manufacturing vehicles.
Rivian has worked with Amazon to finalize details of the van and has begun producing and delivering them,
Chief Executive RJ Scaringe told analysts during a conference call last week.