Electric vehicle manufacturer Rivian and Amazon are reportedly in talks to end their exclusivity agreement for electric delivery vans, after the e-commerce giant ordered less vehicles than originally planned.
Amazon announced plans to buy 100,000 electric vans from Rivian for US$440 million in 2019 as part of its long-term aim to operate climate-neutrally by 2040 and expand its own US delivery fleet significantly in the process. The 100,000 were due to be on the road by 2030, saving millions of metric tons of carbon per year.
Since then, Amazon has reportedly only met the bare minimum of ordering 10,000 vehicles, leading Rivian seeking to renegotiate the contract, according to a report by The Wall Street Journal.
Roll out to date
In November, Amazon announced that it had completed the roll out of more than 1,000 electric vehicles from Rivian across the US, making deliveries in more than 100 cities. Packages are now being delivered via EVs in cities including Austin, Boston, Denver, Houston, Indianapolis, Las Vegas, Madison, Newark, New York, Oakland, Pittsburgh, Portland, Provo, and Salt Lake City.
According to Amazon, during Q4 2022 it delivered its 10 millionth package using Rivian’s electric delivery vehicles.
In a statement regarding the exclusivity agreement, Amazon said that “nothing has changed with its agreement with Rivian.” The firm continued: “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.”
Rivian spokesperson Marina Norville told The Verge: “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,” Norville says. “The relationship we have with Amazon is a very positive one.”
Rivian recall
This isn’t the first time that the Rivian and Amazon agreement has come under the spotlight in recent months. At the end of last year Rivian recalled almost all its vehicles due to a “loose nut”, which could result in noise and vibration and even loss of control during steering. Rivian recalled 12,200 vehicles because of the defect, according to the Financial Times.
At the time, Rivian noted that the repair to the loose nut only takes a few minutes to complete, with the company expecting to complete the recall in 30 days.
Amazon financial results
The scaled down order plans for Rivian’s EVs may also be the result of weak financial results at Amazon. US media highlighted that 2022 was the slowest year of growth in Amazon’s 25-year history as a public company.
Revenue increased 9% with consumer spending shacked by inflationary pressures and the rising cost of living. In January this year, Amazon also began its biggest-ever staff redundancy programme, axing 18,000 jobs around the globe as the global economic downturn worsened.
Europe EVs
In addition to the roll out of EVs in the US, Amazon plans to invest more than €1 billion over the next five years to further electrify and decarbonize its transportation network across Europe. The investment is also intended to drive innovation across the industry and encourage more public charging infrastructure, which will help enable the broader transportation industry to more quickly reduce emissions.
