Rivian, the electric vehicle (EV) manufacturer, is reportedly in talks with Amazon to end the exclusivity of their 2019 purchase agreement, allowing Rivian to boost its sales by courting other customers. Currently, Amazon is the exclusive buyer of Rivian’s electric delivery vans, with the retail giant ordering 10,000 vans this year, at the low end of a previously mentioned range, causing Rivian to be unhappy.
According to The Wall Street Journal, anonymous sources familiar with the matter claimed Rivian is unhappy that Amazon ordered fewer vehicles than expected, which has led the EV maker to seek other customers. As it stands, the Amazon pact remains a crucial component of Rivian’s finances, with the vans representing one-third of Rivian’s production volume.
The exact terms of the proposed changes haven’t been released, but the termination of the exclusivity clause would enable Rivian to boost its sales by seeking out other buyers. The talks with Amazon are ongoing, according to the sources.
In response to the reports, an Amazon spokesperson told Engadget that Rivian is still an “important partner” and that it still intends to buy 100,000 vans by 2030. Amazon’s representative also stated that the company wants “others to benefit” from Rivian technology, as having more electric delivery vehicles in service would ultimately benefit everyone.
The expansion of sales beyond Amazon would significantly boost Rivian’s output and provide greater financial stability as the company ramps up sales of its R1S SUV and R1T pickup, and works on its more affordable R2 line. Rivian made just 24,337 vehicles in 2022, making larger van orders important for Rivian’s financial health.
However, despite a large cash reserve, thanks in part to Amazon’s significant investment, Rivian is still struggling to reach profitability and has engaged in two rounds of layoffs over the past year to address a tough economy, rising costs, and shrinking access to funds. Therefore, there is pressure on the company to avoid future cutbacks, and improved sales will help on that front.
