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Rivian makes electric trucks and SUVs. The EV start-up also makes electric delivery vans for Amazon.com.
Courtesy Rivian
Shares of
Rivian Automotive
fell after a report said the electric truck start-up is in talks to end an exclusivity pact with Amazon.com. That might have been an overreaction, judging by Amazon’s response to the news.
The Wall Street Journal reported Monday that Rivian (ticker: RIVN) is seeking to remove an exclusivity term in its agreement with Amazon (AMZN) after the e-commerce retailer ordered about 10,000 electric delivery vans for this year, which was on the lower end of Amazon’s range.
“We continue to work closely together, and are navigating a changing economic climate, similar to many companies,” a Rivian spokeswoman told Barron’s in an emailed statement. “The relationship we have with Amazon is a very positive one.”
Amazon told Barron’s it still plans to purchase 100,000 Rivian vans by 2030. The company can buy vans from anyone under the terms of the agreement. Rivian, on the other hand, can only sell its vans to Amazon.
Rivan shares (ticker: RIVN) fell 3% Monday. The
S&P 500
declined 0.2% while the
Nasdaq Composite
gained 0.5%.
However, the end of the exclusivity pact would be a good thing for Rivian. That would allow Rivian to sell commercial vehicles to more than one customer. Amazon is committed to Rivian in the long run, too.
“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,” an Amazon spokesperson said. “That’s a big part of why we invest in companies like Rivian—to both meet our needs and to help scale technologies that will benefit others and protect our planet for future generations.”
Amazon was an early investor in Rivian and holds about 17% of the total shares outstanding.
Wedbush analyst Dan Ives said an ending of the exclusivity deal would be a potential positive, but noted that skeptics remain. “It’s a potential win but right now the Street feels like Rivian cannot walk and chew gum at the same time,” Ives said. He rates shares Buy and has a $25 price target.
Rivian has had trouble ramping up its production. Wall Street expected roughly 60,000 deliveries in 2023. The company guided to about 50,000 units.
The stock’s performance hasn’t been good, either. Shares are down 26% this year and off about 64% over the past 12 months.
Write to Al Root at allen.root@dowjones.com
