Rivian had a hard week on the stock market;  is the future of Amazon electric cars at stake?

Rivian had a hard week on the stock market; is the future of Amazon electric cars at stake?

Despite production delays and market turmoil, Amazon still expects the Rivian electric vehicle startup to help it meet ambitious climate targets and put tens of thousands of electric vans into service.

Rivian runs lean: The number of vehicles he made this quarter is almost exactly equal to the number of semiconductors he had, said CEO RJ Scaringe.

These tight margins terrified investors, a panic that culminated on Tuesday when Ford announced that it was selling 8 million shares of Rivian shares, beginning to sever ties with a California company that had promised to help begin the transition to carbon-neutral transportation. . Ford still holds about 94 million shares.

The announcement sent Rivian shares down 20%, but the decline was short-lived. Over the next two days, it rose sharply after Wednesday’s call with investors, where Scaringe maintained the worst of supply chain restrictions. According to him, Rivian will start increasing production for the rest of the year and the company has recorded more than 90,000 pre-orders.

Amazon – one of Rivian’s largest shareholders – does not falter.

Amazon saw that its investment in the company paid off in late 2021, when it reported a profit of nearly $ 12 billion from Rivian’s primary public offering. However, it has experienced a decline this year and reported a loss of $ 7.6 billion in investment in the first three months of 2022.

With 150 million shares and an order for 100,000 electric vans, Amazon uses Rivian vehicles to help it meet its zero net carbon target by 2040. So far, the turbulent share price of Rivian, caused by production delays and supply chain uncertainty, there is no reason to question , say researchers, analysts and company managers.

“Rivian is an important partner for Amazon and we are excited about the future,” Amazon spokeswoman Kate Scarpa said on Friday. “Putting 100,000 electric vans on the road by 2030 is no small feat, and we are determined to work with Rivian to make it a reality.”

Rivian is “ready to become a giant for electric cars,” analysts at Baird Equity Research wrote in Wednesday’s report, adding that the company is “endowed with talent, a clean sheet of paper, a robust balance sheet and a strong partner in Amazon.”

Beril Toktay, director of the Ray C. Anderson Center for Sustainable Business at Georgia Tech, said Rivian’s groundbreaking stock market week was “not a cause for alarm in the long run.”

“These goals of the company are bold. They have to suit their portfolio of strategies, “she said. “So a small fluctuation like this one company, in my opinion, really isn’t a story.”

It’s too early to speculate about a timeline that still lasts nearly 10 years, said Don MacKenzie, who runs the Sustainable Transportation Laboratory at Washington University. But if he did, he would say that Rivian’s trajectory would not change his predictions about the Amazon at all.

“Based on what I know about Amazon’s goals for electric cars, they are planning and launching purchases from a number of different dealers,” he said. “They didn’t put all their eggs in Rivian’s basket.”

According to an April blog post by Amazon, he launched 15 different models of electric vehicles on the road, including vans, electric trucks and electronic rickshaws. In addition to partnering with Rivian, it is working with carmakers Stellantis and Mahindra to create a global supply fleet, Scarpa said.

“There is no one-size-fits-all approach,” she added.

Amazon placed an order for 100,000 electric vans from Rivian in September 2019. It began testing these vans in Los Angeles in February 2021.

Since the start of the test program, Rivian has delivered “pre-production” vehicles 90,000 packages and traveled 50,000 miles.

Of the expected 25,000 vehicles from Rivian this year, Scaringe estimates that about one-third – about 8,300 – will be electric supplies. Rivian has launched a 700 cubic foot delivery and is testing a 500 cubic foot model.

After months of gathering feedback from Amazon drivers, which led to “a lot of improvements,” Scaringe said the supplies “would start to grow and hopefully start to see many more. all our neighborhoods deliver packages. ”

According to CFO Claire McDonough, Rivian produced 2,553 vehicles and delivered 1,227 in the first quarter of this year. in 2025.

Scaringe assured investors that Rivian was ready to increase production, and said on Wednesday that Rivian had already gone through the worst of the shortcomings.

“We work very closely with suppliers … we have made sure that the constraints and situations we have dealt with over the last few weeks are intended to be overturned,” he said. “We could not be more confident in the way ahead. …

“We are the driver in terms of our future growth.”

Rivian reported sales of $ 95 million in the first three months of 2022. It reported a net loss of $ 1.6 billion, compared to a loss of $ 414 million in the same period last year.

It spent $ 547 million on research and development, up from $ 289 million a year earlier, and attributed most of the loss to transportation costs, supply chain problems, and significant labor and overhead costs.

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