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Rivian says pricing dispute with seat supplier threatens Amazon pickup truck program – TechCrunch

Rivian has filed a lawsuit against Commercial Vehicle Group, alleging the supplier breached a contract and nearly doubled the price of a set of custom seats for electric vans it produces for Amazon and potentially other commercial customers.

WSJ was first to report on the suit, which was filed March 9 in Wayne County court in Michigan. Commercial Vehicle Group claims in court that it is not contractually bound to honor the originally agreed price.

Rivian warned in the complaint that if the dispute is not resolved, it could be forced to shut down the commercial van program, causing imminent and irreparable harm to the company and its other suppliers.

News of the complaint sent Rivian shares tumbling 7% on Monday.

Rivian produces the R1T electric pickup truck and the R1S SUV for consumers. It also has a contract with Amazon, which owns about 18% of Rivian, to supply the e-commerce giant with 100,000 electric vans by 2030. Rivian also plans to start selling its electric delivery vans to other business customers. in 2023.

Production of the Amazon-Rivian Prime Van, or RPV, would be delayed if a new supplier were to be found for the custom package, which includes the seat, surrounding trim and jump seat, Rivian says in the original complaint. Rivian added that the seating package includes “safety-critical” components that require well over a year of testing before Rivian can validate them in production vehicles.

A Rivian spokesperson said CVG continued to provide seats to Rivian and the parties were discussing a resolution.

Rivian claims in the complaint that Commercial Vehicle Group supplied the company with the seating sets at the agreed upon price. In February, that changed and Rivian alleges that CVG “held its supply hostage and threatened to stop shipping all seat packages to Rivian” unless the automaker agreed to pay about double that. price.

Rivian has issued “under reservation” orders for higher priced seating packages to avoid a disruption in supply. However, the complaint alleges that CVG refused to honor those purchase orders until Rivian agreed to release CVG from any breach of contract claims.

A motion hearing is scheduled for May 17, according to the court.

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