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Rivian Is In a Legal Battle With Seat Supplier That Will Delay Amazon's Electric Vans

Automotive companies very rarely have only one supplier for critical components. Tesla makes its own seats. You may be asking how these two things relate to each other, but it is quite simple: Rivian seems to have only one supplier for its Amazon delivery vans, and it does not make them itself, which led the company to sue its seat supplier for hiking prices.
Rivian is suing Commercial Vehicle Group for excessive price increase for EDV seats 15 photos
Rivian is suing Commercial Vehicle Group for excessive price increase for EDV seatsRivian is suing Commercial Vehicle Group for excessive price increase for EDV seatsRivian is suing Commercial Vehicle Group for excessive price increase for EDV seatsRivian is suing Commercial Vehicle Group for excessive price increase for EDV seatsRivian is suing Commercial Vehicle Group for excessive price increase for EDV seatsA rare sighting of the future delivery van Rivian developed for AmazonA rare sighting of the future delivery van Rivian developed for AmazonA rare sighting of the future delivery van Rivian developed for AmazonA rare sighting of the future delivery van Rivian developed for AmazonRivian EDVRivian EDVRivian EDVRivian EDVRivian revealed all derivatives of its delivery vans in IPO: EDV 500, 700, and 900.
According to The Wall Street Journal, Rivian filed a lawsuit stating that Commercial Vehicle Group violated the contract the two companies had by making the components much more expensive than it said they would be right after the contract was signed.

The supplier denied that was the case and said prices increased because Rivian changed the seat design. If that is correct, the higher price could have a feasible explanation. Commercial Vehicle Group also added that there was no clause that forced it to deliver the seats at lower prices.

CNBC got in touch with Rivian and with Commercial Vehicle Group to try to learn more about the lawsuit. Only Rivian got in touch with CNBC to inform them that the seat supplier was still delivering the seats, which only makes sense if Rivian is still paying what the company asked for them. The EV maker would be discussing with its supplier “a resolution to the dispute.”

The lawsuit is a vital sign that Rivian tried to discuss that in more friendly terms with Commercial Vehicle Group and that it did not work. For Rivian to keep paying more than it thinks it is fair for seats even with the lawsuit means it did not have a plan B for these components. In the automotive industry, that is a big mistake, especially when there is no seat shortage in the market.

Rivian could have followed Tesla in that regard and decided to produce its own seats. The problem is that this strategy usually makes the seats cost more than they would if a company specialized in making them was in charge. The price increase shows Commercial Vehicle Group did not offer Rivian that advantage. The lawsuit should help explain what happened.

 
 
 
 
 

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