A contract dispute with Rivian’s seat supplier led to a drop in share prices

Rivian has filed a lawsuit against car parts manufacturer Commercial Vehicle Group over the supply of seats.

Rivian filed a lawsuit against the Commercial Vehicle Group in March, alleging that a supplier in Ohio had threatened to stop giving Rivian a full electric Amazon van if the automaker did not pay “about twice the agreed price.”

Also read: Rivian will build 25,000 EVs this year, securing 10,000 reservations since the price increase

The news of the lawsuit was just public, leading to a 7% drop in Rivian shares on Monday.

The commercial vehicle team will provide Rivian with a driver’s seat, a jumping seat and various parts for an Amazon van. It is important that Rivian does not face too many obstacles in the production of the van, as he has signed a contract to deliver 10,000 of them to Amazon by the end of this year. All ordered 100,000 vans from Amazon Rivian.

Rivian claims in court that less than 100 seat packages remain to be installed, and that the Commercial Vehicle Group will be forced to suspend production if it does not resume deliveries. The electric car manufacturer said there was no alternative supplier for the seat packs and that finding another could take up to a year. Rivian reportedly agreed to pay $ 775 per seat package and the supplier demanded double that amount.

The group of commercial vehicles denies that it has breached the delivery contract to Rivian and says it is not obliged to deliver the seats at a lower price. The supplier also claims that Rivian raised the price only after proposing various engineering and design changes. The Wall Street Journal reports.

Following the appeal, Wayne County District Court Judge Brian R. Sullivan ordered a temporary state of emergency during the trial, requiring the Commercial Vehicle Group to continue delivering seats.