Rivian and Amazon’s Exclusive Electric Van Deal Might Soon End

Over the years, Rivian has experienced serious ups and downs. The company’s shares fell drastically after an inflated IPO price of $78, and it has struggled with turnover, a tough market, and even production problems that have left investors frustrated. And now, one of the deals that kept it going is on the verge of coming to an end.

Exclusive Deal Between Rivian and Amazon

Back in the days when Jeff Bezos stood as CEO of Amazon, a deal was struck between Amazon and Rivian. Not only did the tech giant invest millions in the EV manufacturer, but it placed an order for 100,000 electric delivery vans. At the time, there were two goals, to tackle climate change and have the vehicles on the road by 2024.

However, the ambitious goal is nowhere in sight now, with Amazon reportedly ordering the minimum of 10,000 vehicles for 2023. Because of that, Rivian is looking to renegotiate. The question remains: is it even an option for the deal to be renegotiated?

The original terms of the deal stated that the electric delivery vans would be exclusive to Amazon for four years after the initial batch was delivered. Moreover, the tech giant only needed to order 10,000 vehicles in the first two years to keep the exclusivity, meaning it is still within the lines of the deal.

Rivian Vans Are In Use

Amazon is not sitting the vans in a warehouse. During the 2022 holiday season, the company started to deploy more of Rivian’s electric vans to more than 100 US cities, putting more than 1,000 of them on the roads. That has even led to millions of packages delivered via zero-emissions vehicles.

The cities benefiting from the Rivian vans include Austin, Boston, Denver, Houston, Indianapolis, Las Vegas, and New York.

Will There Actually Be Negotiations?

Kate Scarpa, an Amazon spokesperson, told The Verge, “While nothing has changed with our agreement with Rivian, we’ve always said that we want others to benefit from their technology in the long run because having more electric delivery vehicles on the road is good for our communities and our planet.”

Therefore, while the company has stated that the deal with Rivian is still in place, there might be wiggle room. After all, since Amazon is also an investor, it is in its best interest for the EV company to do well. That is especially so if Amazon’s reduced orders are a result of conservative spending due to things like the layoffs and halted construction recently seen.

Opportunity for Rivian

Ending the exclusivity is an opportunity for Rivian. While the company has struggled in the past and still faces a few issues in a tough economy, it is on more stable ground than it once was. Therefore, the ability to sell its electric vans to others would put it in an even good spot moving forward.

It is even better news for the EV manufacturer if the “positive relationship” with Amazon continues. And according to Rivian spokesperson Marina Norville, it is. “Our relationship with Amazon has always been a positive one — we continue to work closely together, and are navigating a changing economic climate, similar to many companies.”