Rivian filed a lawsuit against commercial vehicle group (CVG) because the supplier violated the contract and doubled the price of seat bags customized for electric trucks produced by Amazon and other potential commercial customers.
The Wall Street Journal (WSJ) first reported the lawsuit filed in Wayne County Court, Michigan on March 9. The commercial vehicle group said in a court document that it had no contractual obligation to comply with the initially agreed price.
Rivian warned in the complaint that if the dispute is not resolved, it may be forced to close the commercial vehicle project and cause imminent and irreparable harm to the company and its other suppliers.
News of the lawsuit sent rivian's share price down 7% on Monday.
At present, rivian is producing r1t electric pickup truck and R1s SUV for consumers. In addition, it has signed a contract with Amazon, which owns about 18% of rivian, to provide 100000 electric trucks for the e-commerce giant by 2030. In addition, rivian plans to start selling its electric delivery vehicles to other commercial customers in 2023.
Rivian said in the initial complaint that if a new supplier must be found for the customized package, the production of Amazon rivian prime van (or RPV) will be delayed. Rivian added that the seat package includes "safety critical" components, which need to be tested for more than a year before rivian can be verified on production vehicles.
A spokesman for rivian said CVG continued to provide rivian with seats and the two sides were discussing a solution.
Rivian said in the complaint that CVG provided the company with seat bags at an agreed price. In February, the situation changed. Rivian said that CVG "hijacked its supply and threatened to stop shipping all seat bags to rivian" unless the carmaker agreed to pay about twice the price.
Although rivian placed an order for seat bags at a higher price to avoid supply interruption, the indictment said that CVG refused to fulfill these spot purchase orders - until rivian agreed to release CVG from any claim for breach of contract.
According to the court, the motion hearing is scheduled to be held on May 17.