Rivian, the electric vehicle automaker, has announced that its commercial electric vans will no longer be exclusive to Amazon. This move comes as the company ends an exclusivity deal that had been in place since 2019 when Amazon invested over a billion dollars in Rivian. The announcement had a positive effect on both companies’ stock prices and coincided with Rivian’s latest earnings report for the third quarter.
Key Takeaway
Rivian has ended its exclusivity agreement with Amazon, allowing other companies to purchase its commercial electric vans. Amazon reached the target of 10,000 Rivian vans on the road, but the number fell below expectations. This move benefits both Rivian and Amazon, as the expansion of electric delivery vehicles supports environmental sustainability.
Rivian and Amazon Modify the Exclusivity Agreement
In March, Rivian initiated talks with Amazon to remove the exclusivity clause before the initial timeline. The original agreement stipulated that exclusivity would end after Rivian had delivered a total of 100,000 electric vans by the end of the decade. Rivian confirmed during an investor call that it remains committed to fulfilling Amazon’s goal.
“We’ve been working on the exclusivity agreement with Amazon for a while,” said Rivian CEO RJ Scaringe. “During this time, we have been forging relationships with a variety of commercial operators, ranging from last-mile to retail.”
Amazon’s Milestone Achieved, But a Lower Number Than Expected
In October, Amazon proudly announced that it had reached the threshold of having 10,000 Rivian-built vans on the road, meeting the sales target set by both companies for 2023. However, reports indicate that this number was on the lower end of a range previously communicated by Amazon to Rivian. This discrepancy led to discussions about ending the exclusivity agreement ahead of schedule.
“We’ve always expressed our desire for others to benefit from Rivian’s technology in the long run because having more electric delivery vehicles on the road is beneficial for our communities and the environment,” stated Udit Madan, Amazon’s transportation boss.
It is worth noting that Amazon owns a 17% stake in Rivian. The retail giant operates an extensive fleet of vehicles, including tens of thousands of semi-trucks, vans, and around a hundred planes.
