Rivian widens its e-vehicle business beyond its ‘exclusive’ Amazon partnership

Rivian, an electric vehicle startup, says it will expand its fleet business that looks to be solely tied to Amazon. The e-vehicle company reveals from the new section of Rivian’s website that it will start taking orders for its electric delivery vans in 2022 and plans to deliver to fleet customers in 2023.
It also announced that it would sell fleet versions of its R1T electric pickup truck and R1S electric SUV, which widens the customer base beyond the consumer adventurer that Rivian has been focusing on. This giant move puts Rivian in competition with Ford’s commercial version of the F-150 Lightning, as well as FleetOS, a fleet management platform, and a charging infrastructure solution.

Customers will be able to utilize Rivian’s online fleet configurator to plan and make fleet orders beginning early next year, according to the new component of the site, which debuted on Friday and was tweeted out by some Rivian employees. The first deliveries would not take place until the following year.

The fleet page of Rivian’s website was released just a day after the company was sued for alleged gender discrimination by a former VP, who claimed, among other things, that Rivian had manufacturing quality issues and unrealistic delivery expectations.

When Rivian announced its intention to go public earlier this year, it included additional information regarding the Amazon deal in SEC filings. After Rivian provided the initial batch, the two firms agreed that Amazon would have exclusive rights to the delivery vehicle for four years. Amazon would also have the right of first refusal over any other companies that wished to buy the cars from Rivian for the next two years. However, the news that Rivian is selling to other fleet customers before 2024 suggests that the company’s deal with Amazon has some wriggle room. Neither company could be reached to explain or comment on Amazon’s exclusive terms to Rivian’s vans.

There are a couple of stipulations in the deal with Amazon that could nullify the exclusivity period, but they don’t appear to be applicable at this time. Suppose Amazon does not order 10,000 of Rivian’s vans in each of the two years after they go into production. In that case, the startup will be required to reimburse it for certain costs, and the exclusivity period will be terminated. The same is true if Amazon cancels its agreement with Rivian before ordering all 100,000 vans.

Rivian’s facility in Normal, Illinois, can produce up to 150,000 vehicles per year, approximately 65,000 of which would be for the R1 pickup and SUV and 85,000 for the RCV commercial delivery vans.

That doesn’t imply Rivian will be able to reach that capacity overnight. In an update to its S-1, Rivian stated that based on its current production plan, it expects to fill a pre-order backlog of about 55,400 R1 vehicles by the end of 2023.

Reports say ”Rivian has yet to produce a significant number of vehicles and competes with well-capitalized electric vehicle startups as well as incumbents such as General Motors (GM) and BMW, both of which have decades of experience and multi-billion dollar plans to expand EV production.”

Whatever is going on, it seems that Rivian’s agreement with Amazon isn’t as restrictive as it first appeared – something the firm will certainly reveal more about after it goes public this week.

Brandy Fietsop
Brandy is a contributor at The Volter and she is a passionate writer.

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