Rivian and Bosch Are Taking Each Other to Court After EV Motor Deal Collapses

Things are getting heated between Rivian and Bosch. The companies are suing each other after Rivian canceled its contract with Bosch to build electric motors for its vehicles, per Crain’s Detroit Business. Bosch claims that Rivian breached its contract by backing out of the deal without paying the $204 million that it owed to the German parts supplier. Meanwhile, Rivian alleges that it only backed out of the deal because Bosch failed to deliver product and meet agreed-upon quality thresholds. And they’re both bringing their receipts to court.

The companies reached a deal in 2019, where Bosch was to supply Rivian with the components necessary for its quad-motor powertrain. Bosch spent millions retooling a plant in Germany and building a 30,000-square-foot factory in South Carolina to manufacture the motors. According to the company, that contract safeguarded it in the event Rivian went bust, by forcing Rivian to pay Bosch for its investments and unamortized costs if the deal was canceled. Then, in 2023, the very much still-functioning Rivian allegedly moved to cancel.

Now, Bosch is accusing Rivian of canceling because it had been secretly developing its own electric motor and drive unit, called “Enduro,” during their deal. According to Bosch, Rivian planned to replace its motors with Enduro power units moving forward, as it was more cost-effective for Rivian. At the time, it’s said Rivian was losing $30,000 to $40,000 per vehicle and needed to reduce manufacturing expenses. “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,” the suit said, per Auto News.

And then there’s Rivian’s side of the story. Rivian says that Bosch failed to supply enough motors, and that many of those that it did deliver were of poor quality, leading to manufacturing delays and financial losses. Rivian’s countersuit claims that Bosch intentionally under-invested in the development of its electric motors, while entering into contracts with several upstart EV companies, betting that most would go bust before the end of the contract.

“Bosch made a calculated gamble to overpromise to multiple start-up electric vehicle companies on the theory that at least some of them would soon fail,” Rivian’s lawsuit said.

By the end of 2022, Bosch had reportedly delivered 101,000 motors, less than half the contractual requirement at the time. Rivian’s suit also cites a letter sent by the brand’s director of procurement to Bosch, which apparently stated that Bosch’s inadequate supply was “the #1 threat to our organization’s success.” Rivian argues that Bosch’s incompetence resulted in production shortages that kept the EV maker from shipping some 30,000 vehicles that year.

According to Bosch’s lawsuit, it tried to send engineers to Rivian for assembly line assistance. But Rivian claims that it sent engineers to Bosch’s plant, where they observed subpar quality control and product handled by unqualified personnel, including teenagers.

There’s a lot of finger-pointing right now between Rivian and Bosch. The courts will ultimately sift through all of it and make a decision but, either way, the result is going to look bad for somebody.

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