Electric delivery van maker Rivian wants to cancel Amazon exclusivity deal

Electrical supply van maker Rivian Automotive Inc. is reportedly holding talks with its chief backer Amazon.com Inc. in an effort to attempt to scrap the exclusivity deal it signed with the retail big in 2019. Below that deal, Amazon was made Rivian’s sole buyer.

Information of the talks was first reported by the Wall Avenue Journal, which cites unnamed sources aware of the matter as saying that Rivian isn’t completely happy that Amazon solely purchased 10,000 electrical vans in fiscal 2023. Whereas that quantity was within the bounds of its contract, it was simply in regards to the minimal Amazon may get away with, and it’s believed to be inflicting issues for Rivian.

Amazon has dedicated to purchasing 100,000 Rivian automobiles by 2030 and whereas this hasn’t modified, it does seem like open to the thought of ending its exclusivity deal.

“Whereas nothing has modified with our settlement with Rivian, we’ve all the time mentioned that we would like others to learn from their know-how in the long term as a result of having extra electrical supply automobiles on the highway is sweet for our communities and our planet,” an Amazon spokesperson advised Reuters. “We could have extra of our customized vans from Rivian hitting the streets on daily basis as we proceed to companion collectively to convey 100,000 electrical vans to the highway by 2030.”

As to the present variety of Rivian vans on the highway, Amazon would solely say that it’s working “hundreds” with out being extra particular.

Rivian may little doubt do with promoting extra vans, quicker, as it’s at present bleeding cash. Throughout its most up-to-date, fourth quarter earnings report, it posted a loss of $1.7 billion. Whereas that was down barely from the earlier yr, Rivian’s full-year numbers had been extra telling – it misplaced $6.8 billion in fiscal 2023, up from the $4.6 billion loss it incurred 12 months earlier.

Not solely is Rivian a cash pit, however it has additionally needed to deal with a few in depth recollects affecting its electrical vans lately. The primary of these involved almost its entire fleet of vans, which had been affected by an issue with their fasteners that would trigger the steering wheel to detach. Extra lately, in February, Rivian’s R1T (pictured) and R1S automobiles had been recalled after it was discovered that they could have faulty airbag sensors which may stop it from deploying correctly.

Rivian has truly been beset with unhealthy information. In December, the corporate revealed {that a} proposed take care of Mercedes-Benz AG to collaborate on the manufacturing of electrical vans in Europe had been put on hold. Then in February, it introduced that it’s laying off 6% of its workforce as a cost-cutting measure.

In the meantime, Rivian has promised to considerably enhance deliveries of its vans over the following few months. It mentioned it should shorten its lead instances from 12-18 months to lower than three months, and is planning to construct 50,000 new vans in 2023, twice as many because it did final yr. Rivian beforehand didn’t hit its 2022 goal of 25,000 vans, falling brief by just a few hundred.

Regardless of this, Rivian’s 50,000 benchmark fell in need of the 67,000 van goal that analysts had anticipated the corporate to announce, sending its inventory down within the wake of February’s earnings name. Rivian’s shares have misplaced virtually 90% of their worth for the reason that firm’s initial public offering in November 2021.

Executives of Rivian reiterated final month that the corporate has sufficient money readily available to maintain itself up and operating till 2025. Nevertheless, with officers now seemingly determined for Amazon to permit it to cater to different clients, Rivian appears to be fearful about its capability to maintain going past that date.

Picture: Rivian Automotive