Rivian Dispute With Seat Supplier Could Delay Production of Amazon Vans

An Amazon Rivian electric delivery van at the company's manufacturing facility in Normal, Ill.
An Amazon Rivian electric delivery van at the company's manufacturing facility in Normal, Ill. (Jamie Kelter Davis/Bloomberg News)

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Rivian Automotive Inc. fell almost 7% May 16 on word the electric vehicle startup is in a dispute with a key seat supplier that could jeopardize its delivery van contract with patron Amazon.com Inc.

Rivian alleged in a lawsuit that Commercial Vehicle Group Inc., a New Albany, Ohio-based auto parts manufacturer, threatened to stop supplying seats unless the carmaker agreed to pay “approximately twice the agreed-upon price,” according to a copy of the complaint.

Shares of Rivian fell 6.9% to close at $24.86 and are down 76% so far this year. Commercial Vehicle dropped 2.4% to $6.45.

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The suit involves supplies of vehicle components such as the driver seat, jump seat and trim used for battery-powered vans Rivian is building for Amazon. The tech giant, which is one of Rivian’s biggest investors, has ordered 100,000 of the startup’s electric delivery vans, the first 10,000 of which are due by the end of this year.

A spokesperson for Rivian said Commercial Vehicle Group has “continued to supply seats to Rivian” and that the two companies are “discussing a resolution.” Commercial Vehicle had no immediate reply to a request for comment. The suit was reported earlier by The Wall Street Journal.

Irvine, Calif.-headquartered Rivian alleged in the suit, which was filed in March, that it had fewer than 100 seat packages left for installation and that it faced “imminent shutdown” of its entire production line for battery-powered vans. It also claimed Commercial Vehicle Group would not allow it to place new orders for additional seat packages at the higher prices.

— With assistance from Chris Dolmetsch.

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