Rivian, the electric vehicle (EV) manufacturer, and Amazon, its largest shareholder, are reportedly in talks to end the exclusivity part of their EV van deal. Amazon had initially ordered 100,000 electric delivery vans from Irvine, California-based Rivian in 2019, as part of the company’s goal to cut carbon emissions. It has since taken deliveries and added the EDVs to its fleet, with over 10 million packages delivered. However, the retail giant has now informed the EV maker that it wants to buy just 10,000 vans this year, which is at the low end of the range it previously provided.
According to the Wall Street Journal, anonymous sources close to the situation confirmed the discussions, and Rivian’s stock fell by around 3% in trading before the start of business. However, the EV manufacturer issued a statement saying that it was continuing to work closely with Amazon. The statement also revealed that while the exclusivity element of their relationship might be coming to an end, their positive relationship would remain intact.
The deal initially struck with Amazon for 100,000 EDVs was seen a significant coup for the EV manufacturer, which now produces the R1T pickup and R1S SUV in addition to the electric delivery van for Amazon. The milestone order was not only worth billions of dollars but was also expected to give Rivian’s EV technology a significant boost. A successful partnership with Amazon was predicted to enhance the electric vehicle maker’s profile and could even pave the way for working with other high-profile customers.
Amazon’s intention to cut through its carbon emissions highlights the vital role that environmentally friendly delivery vehicles will play in the future of logistics. The retail giant has committed to achieving net-zero carbon emissions by 2040, which is ten years ahead of the 2050 target set by the Paris Climate Agreement. As part of that effort, it pledged to purchase 100,000 electric-powered vans from Rivian, which is currently valued at around $28bn. However, it is unclear what the talks between the companies might mean for that valuation or future investment in the venture.
In conclusion, while the exclusivity element of the deal between Amazon and Rivian may no longer be intact, the partnership remains strong, and the talks between the two companies will be of much interest to the broader automotive industry. Amazon’s commitment to cutting carbon emissions, and Rivian’s position as a leading EV manufacturer make their continued association essential for the fulfillment of their respective future goals. The influence of these two companies on the logistics and EV markets cannot be overemphasised, and their continued partnership will certainly play a critical role in the development of new technologies and logistics platforms in the coming years.
