Rivian wants to end its exclusive deal with Amazon
Rivian wants to offer its electric delivery vans to others in the future and is therefore negotiating with Amazon to lift the exclusivity clause that is part of the companies’ deal. This comes as Amazon’s orders remain allegedly below expectations.
The exclusivity clause dates back to 2019 when Amazon agreed with Rivian to purchase 100,000 electric vans by 2030. Amazon has been using the first Rivian electric vans since last year as reported.
Now Amazon placed a firm order with Rivian for only around 10,000 electric transporters in 2023, thus falling short of the EV maker’s expectations, according to the Wall Street Journal. The WSJ cites Rivian’s internal sources saying this was not the first time Amazon has stayed at the low end of the agreed range for its firm orders.
Resentment against its own investor is rising at Rivian, as it calculated more orders to justify manufacturing the electric delivery van on its own production line. That is why there are now talks about dissolving the existing exclusivity agreement. Without it, Rivian would be free to sell the vehicles to other customers.
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Where Amazon stands on removing the exclusivity clause is unclear. The online retailer is, of course, well-invested in obtaining electric delivery vehicles to meet its sustainability goals. The question remains: what happens – also in terms of prices – if Amazon starts buying EVs from other manufacturers?
In Europe, the company announced in October 2022 that it would invest more than one billion euros in expanding its electric fleets on the continent over the next five years. This includes all classes of electric delivery vehicles, such as heavy trucks and vans.
Rivian is under pressure to meet expectations placed on the company and continues to ramp up production. Last year, Rivian delivered 20,332 electric vehicles, but due to investment costs in scaling up production, its losses increased to $6.75 billion.