Rivian drops 12% as Amazon signs deal to buy electric delivery van from Stellantis

• Rivian has a prior deal with Amazon to deliver 10,000 vehicles by 2022

• Stellantis CEO says new order is a ‘significant number’

Electric pickup truck maker Rivian Automotive Inc fell after Amazon.com Inc, one of its biggest backers and corporate customer, signed a deal to buy electric delivery vans from rival carmaker Stellantis.

Rivian, on Wednesday, dropped nearly 12% to $89.28, the biggest intraday drop in more than two weeks.

In a press release, Stellantis said its upcoming electric van Ram ProMaster battery electric vehicle (BEV) is due 2023, and Amazon will be its first corporate customer to use the van as its last-mile delivery vehicle.

Although the carmaker didn’t disclose the size of the deal, Stellantis CEO Carlos Tavares said the order was a “significant number.”

Threat to Rivian

Rivian investors are seeing the Stellantis-Amazon deal as a threat to California-based EV maker, which has been seen as a front-runner among the EV startups trying to compete with market incumbent Tesla Inc, due to Amazon backing.

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The e-commerce giant in 2019 ordered 100,000 electric delivery vans from Rivian, which is scheduled to be handed over by 2030, and the first 10,000 of which are due by the end of 2022.

“Amazon’s scale is globally unprecedented, and we expect them to purchase vehicles from many providers,” Rivian said in an emailed statement, mentioning that its deal with Amazon remains “intact, thriving and growing” and called the latest development “good news” for the industry.

“Large fleets focused on electrification and carbon neutrality represent a win for the mission” of Rivian and Amazon, the statement added.

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Amazon, in a separate statement, said that it had always intended to work with multiple providers of electric delivery vans.

“We continue to be excited about our relationship with Rivian, and this doesn’t change anything about our investment, collaboration, or order size and timing.”

Rivian’s production cut

The decline adds to Rivian’s recent slide after the company announced that it couldn’t reach the production forecast of 1200 vehicles last year.

The market cap of the California-based EV maker briefly topped $120 billion following its November listing valuing it more than Ford and General Motors at that time.

After its blockbuster IPO, Tesla CEO Elon Musk taunted Rivian and tweeted, “There have been hundreds of automotive startups, both electric and combustion, but Tesla is [the] only American carmaker to reach high volume production & positive cash flow in past 100 years.”

Picture Credit: InsideEVs