Amazon and Rivian's Electric Delivery Partnership: Progress and Future Prospects

Amazon.com Inc and Rivian Automotive have formed a significant partnership focused on electric delivery vans since Rivian went public in 2021. This collaboration is highlighted by a major milestone recently achieved and looks ahead to what both companies may expect in the future.

Details of the Partnership

Amazon has teamed up with Rivian, a company it invested in prior to its IPO, to create a fleet of 100,000 electric delivery vehicles by 2030. This initiative is part of Amazon's broader Climate Pledge, aiming for net-zero carbon emissions by 2040.

Current Progress

As of now, Amazon is one-fifth toward its goal, having placed more than 20,000 Rivian electric delivery vans in service. The first vehicle began operations in 2022, illustrating rapid development in this initiative.

The majority of these electric vans are currently utilized in the United States, but their deployment has also expanded into the European market. By 2024, it is estimated that Rivian vans will have completed over one billion package deliveries for Amazon.

Looking Forward

Despite achieving 20,000 units, this number represents just a fraction of the target. In March 2023, Amazon had only 3,000 of these electric delivery vans in its fleet, indicating swift growth in the past months.

Amazon continues to expect further deliveries from Rivian to meet its climate goals and improve efficiency for its delivery drivers. Rivian sees the fulfillment of Amazon's 100,000-unit order as a vital priority, which would not only support its production metrics but also assist in its transition to consumer vehicle models.

Earlier this year, Rivian CEO RJ Scaringe noted that the deployment of electric delivery vans for Amazon had been slower than initially expected. In November 2023, the company adjusted its agreement with Amazon to allow for non-exclusive sales of commercial vans, enabling them to offer their products to additional customers aiming to reduce CO2 emissions.

At the same time, Rivian disclosed that it was in active discussions with potential fleet customers. In December 2023, the company signed a deal with AT&T Inc as part of its strategy to diversify its client base.

Amazon's Shareholding and Future Strategy

Amazon retains a significant investment in Rivian, owning around 16% of the company, and will continue to receive electric delivery vans as part of their partnership. As Rivian expands its electric delivery vehicle segment, the company also looks to grow its consumer vehicle division.

Current Stock Performance

As of the latest trading session, Rivian's stock has decreased by 1%, with a trading price of $12.98. The stock's 52-week range varies from $8.26 to $24.61, reflecting a 39% decline year-to-date in 2024 and a staggering 90% drop since its debut in the market in 2021.

Amazon, Rivian, Electric