Photo: Rivian | Edited
Amazon and Rivian are in talks to end the exclusivity clause of their electric-van deal after the retail giant ordered fewer vans than Rivian expected. The EV maker is trying to convince Amazon to let it sell the electric delivery vans to other companies.
Rivian ended 2022 in a different tone than 2021. The EV startup made waves in 2021 as it delivered the first electric pickup truck in the U.S. market and had rock-solid prospects. One year later, Rivian was riddled with production issues and only produced half the promised vehicles. Moreover, many of them didn't get into customers' hands, leaving around 4,000 EVs produced, but not delivered at the end of 2022.
We're not sure how many of the 25,000 EVs it produced in 2022 were electric delivery vans (EDV) for Amazon. Whatever that number, Rivian wasn't happy when Amazon ordered just 10,000 vans for 2023. The EV startup announced it would produce 50,000 EVs this year, including EDV. It must've counted on more orders from Amazon to get to that number, which are now lost. We guess that the EDV is less complex and easy to manufacture than the luxury R1S and R1T, and Rivian preferred to have a big chunk of the production reserved for the EDV.
Whatever the reason, Rivian is now seeking to convince Amazon to let it sell the EDV to other customers. The 2019 agreement between the two companies stipulates that all the vans Rivian makes should be sold to Amazon for the first four years after the first deliveries. That is, only if Amazon purchased at least 10,000 EDVs in the first two years after the first deliveries, which took place in December 2021.
According to a WSJ report, the talks to amend the agreement are ongoing, although neither company has confirmed them. An Amazon spokesperson said the technology juggernaut remains committed to buying 100,000 EDV vans from Rivian by 2030, as stipulated in the contract. A Rivian spokesperson emphasized the positive relationship between the two companies without offering more insight. Amazon is Rivian's largest shareholder, with a 17% stake.
The EDV deal helped Amazon to slash its fleet's carbon emissions. In the past year, Amazon was forced to adopt cost-cutting measures to mitigate a slowdown in e-commerce sales. The retail giant has paused the construction of its second headquarters in the D.C. area and laid off more than 18,000 workers, one of the most dramatic workforce-trimming measures among technology companies.
For Rivian, the Amazon deal was the anchor needed to stabilize the boat in tumultuous times. Amazon guaranteed other investors that Rivian knows what it's doing and ensured a steady demand for one of the three EVs it builds at its factory in Norma, Illinois. If Amazon agrees to end the exclusivity clause, Rivian could sell the EDV elsewhere, provided it could produce enough.
We're not sure how many of the 25,000 EVs it produced in 2022 were electric delivery vans (EDV) for Amazon. Whatever that number, Rivian wasn't happy when Amazon ordered just 10,000 vans for 2023. The EV startup announced it would produce 50,000 EVs this year, including EDV. It must've counted on more orders from Amazon to get to that number, which are now lost. We guess that the EDV is less complex and easy to manufacture than the luxury R1S and R1T, and Rivian preferred to have a big chunk of the production reserved for the EDV.
Whatever the reason, Rivian is now seeking to convince Amazon to let it sell the EDV to other customers. The 2019 agreement between the two companies stipulates that all the vans Rivian makes should be sold to Amazon for the first four years after the first deliveries. That is, only if Amazon purchased at least 10,000 EDVs in the first two years after the first deliveries, which took place in December 2021.
According to a WSJ report, the talks to amend the agreement are ongoing, although neither company has confirmed them. An Amazon spokesperson said the technology juggernaut remains committed to buying 100,000 EDV vans from Rivian by 2030, as stipulated in the contract. A Rivian spokesperson emphasized the positive relationship between the two companies without offering more insight. Amazon is Rivian's largest shareholder, with a 17% stake.
The EDV deal helped Amazon to slash its fleet's carbon emissions. In the past year, Amazon was forced to adopt cost-cutting measures to mitigate a slowdown in e-commerce sales. The retail giant has paused the construction of its second headquarters in the D.C. area and laid off more than 18,000 workers, one of the most dramatic workforce-trimming measures among technology companies.
For Rivian, the Amazon deal was the anchor needed to stabilize the boat in tumultuous times. Amazon guaranteed other investors that Rivian knows what it's doing and ensured a steady demand for one of the three EVs it builds at its factory in Norma, Illinois. If Amazon agrees to end the exclusivity clause, Rivian could sell the EDV elsewhere, provided it could produce enough.
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