Rivian and Bosch accuse each other of breach of contract

Due to Rivian's decision to bring drivetrain manufacturing in-house, which is breaking a supply agreement, the company is facing a $204 million lawsuit from Bosch.

The US-American automaker company Rivian is battling a legal case with the German tech supplier Bosch, over the former’s move to breach the supply deal to manufacture electric drives in the R1T pickup and R1S SUV.

The legal tussle between the two companies began in July when Bosch sued Rivian for ending the supply deal contract. Rivian didn’t waste time filing a counter-lawsuit on the same day citing a breach of contract and damages of a value to be determined at trial.

The deal, which commenced in 2019, saw Rivian sign a development, production and supply agreement. The deal was in good shape in 2021 as $12 billion was crowdsourced via an initial public offering. However, the deal broke off in 2023 after Rivian encountered supply chain issues.

Consequently, Bosch filed for $204 million in reimbursements against Rivian to get compensation for the revenue loss. In a counter-lawsuit, Rivian claimed that Bosch exhibited “reckless failures” in its drive system supply contract. In addition, Rivian blamed Bosch for production shortages resulting in 30,000 fewer units manufactured in 2022.

Arguing against Rivian’s claim, Bosch says in the lawsuit that Rivian’s failure is a result of a shortage of semiconductors and not drive shortages. The company further explains that Rivian has set up an in-house program to “secretly” replace the deal with another program in which Rivian manufactures its own drive units in a system called ‘Enduro’.

Commenting on the ‘Enduro’ program, Bosch says it may be understandable that Rivian chooses to cut costs and develop a new product, but Rivian cannot simply ignore its “contractual duties” to reimburse Bosch.

In Rivian’s counter-lawsuit, the Former Rivian’s director of procurement, Patrick Hermann, describes Bosch’s failure to deliver motors as “the number 1 threat to our organization’s success.”

As the legal clash lingers on, Rivian still faces a shortage of components for its in-house motors, thereby decreasing its production forecast for the R1T, R1S and vans this month.

This week, Judge Brian Sullivan fixes the next status conference for the lawsuit to be Feb. 3. Counsel lawyers for prosecuting the case for Bosch and Rivian refused to respond to requests for comment, according to Automotive News.

autonews.com (Paywall)

Author: Abdulwaliy Oyekunle