Electric vehicle manufacturer Rivian has found itself in a legal battle with Bosch, the world’s largest auto parts supplier, as both sides exchange lawsuits over a failed e-motor supply agreement. The dispute centers around Rivian’s decision to shift towards in-house production of e-motors, while Bosch accuses the EV maker of breaching their contract and withholding significant reimbursements.
In 2019, Rivian and Bosch signed a deal for Bosch to supply electric motors for Rivian’s flagship models, the R1T pickup and the R1S SUV. However, the relationship soured, leading to a legal fight. Bosch has claimed that Rivian was secretly planning to replace its e-motors while breaching its contractual obligations. Crain’s Detroit Business reports that Bosch’s lawsuit accuses Rivian of failing to pay reimbursements totaling $204 million for investments Bosch made in preparing for motor production. Bosch also claims that Rivian canceled the contract without fulfilling its financial duties.
The legal dispute began in July when Bosch sued Rivian for breach of contract in Wayne County Circuit Court. Rivian, in turn, filed its own lawsuit against Bosch the same day, also alleging breach of contract and accusing Bosch of causing “cataclysmic” damage to Rivian’s brand and finances by failing to meet supply commitments. According to Rivian, Bosch’s underperformance contributed to Rivian only building 24,337 vehicles in 2022, far short of its target.
“Bosch choked off Rivian’s production lines during one of its most crucial moments,” Rivian’s lawsuit reads, blaming the supplier for significant delays. Bosch, however, argues that it made substantial investments to support the production of Rivian’s vehicles, including upgrading its plant in Germany and setting up a new dedicated production line at its South Carolina facility. In Bosch’s view, Rivian’s decision to start producing its own e-motors breached the terms of their agreement.
Rivian introduced its in-house Enduro drive units after experiencing what it called “production woes” due to Bosch’s inability to supply the necessary volume of motors. Rivian engineers said in the lawsuit that during a visit to Bosch’s facility in Germany, one of the production lines was “in shambles” and staffed by “unqualified personnel” who were not using industry-standard technology. The lawsuit even alleges that teenage interns were tasked with holding flashlights for quality control, underscoring Rivian’s frustration with Bosch’s performance.
In a letter from Patrick Hermann, Rivian’s former director of procurement, to Bosch, the automaker expressed serious concerns, stating, “Your failure to deliver e-motors was the #1 threat to our organization’s success.” Rivian’s lawsuit claims that Bosch’s supply issues led to missed production targets and damaged the brand’s reputation during a critical period.
For its part, Bosch asserts that Rivian’s decision to cancel the contract in September 2023, as Rivian shifted to in-house production, was unjustified. Bosch claims that Rivian was contractually obligated to reimburse the supplier for its unamortized costs related to e-motor production, but Rivian has refused to make the payment. “While Rivian’s choice to cut costs and develop a new product may be understandable, Rivian cannot simply ignore its contractual duties to reimburse Bosch,” Bosch’s lawsuit stated.
The legal standoff comes as Rivian aims to stabilize its production capabilities. The automaker plans to build between 47,000 and 49,000 vehicles in 2024, down from its earlier target of 57,000, due to lingering supply chain constraints. Rivian hopes that moving e-motor production in-house will allow it to gain more control over its supply chain and avoid similar issues in the future.