American electric vehicle maker Rivian Automotive is reportedly looking to end its exclusivity agreement with online retail giant Amazon so as to be able to sell its delivery vans to other companies.
According to a pay-walled report from The Wall Street Journal this week, the two companies are in talks to end their exclusivity agreement. Amongst the reasons posited for the negotiations is a desire on Rivian’s part to sell its electric delivery vehicle to others after Amazon’s order for 2023 came in at the low end of expectations.
The Wall Street Journal, citing “people familiar with the matter”, points to Amazon’s order of only 10,000 vans this year, at the low end of a range that Amazon had previously communicated.
Further, the WSJ source added that this was not the first time that Amazon has hovered around the low end of the agreed range for its firm orders.
But the exclusivity agreement remains in place, despite Amazon’s order being at the low end, and has been in place since 2019.
Amazon committed $US500 million (around $A729 million at the time) in September to Rivian and followed that up in the same month with a commitment to buy 100,000 electric delivery vans.
Since then, Rivian has been able to build on the credentials of Amazon’s investment to scale up its factory in Michigan to meet production for Amazon.
A year later, Amazon gave us a first glimpse of the Rivian-made Amazon delivery vans, and in early 2021 the online retailer officially put the vans into service.
All of this meant that Rivian chose to manufacture the electric delivery van on its own production line, but did so under the impression of building many more than Amazon has currently ordered.
An Amazon spokesperson told the WSJ that the company is still planning to buy 100,000 vans from Rivian by 2030, while a Rivian spokesperson reiterated that the relationship between the two companies “has always been a positive one.”
Joshua S. Hill is a Melbourne-based journalist who has been writing about climate change, clean technology, and electric vehicles for over 15 years. He has been reporting on electric vehicles and clean technologies for Renew Economy and The Driven since 2012. His preferred mode of transport is his feet.