The fall follows a report that the electric truck start-up is in talks to conclude an exclusivity agreement with Amazon.com. Given Amazon’s response to the news, this may be an exaggeration.
wall street journal informed of Rivian (ticker: RIVN) is seeking to remove an exclusivity term in its agreement with Amazon (AMZN) after the e-commerce retailer ordered nearly 10,000 electric delivery vans for this year that would limit Amazon’s range. was on the lower end.
amazon told Baron’s It still plans to buy 100,000 Rivian vans by 2030. Under the terms of the agreement, the company can purchase the van from anyone. Rivian, on the other hand, can only sell its Vans to Amazon.
Rivian did not immediately respond to a request for comment about the report.
Rivan shares (ticker: RIVN) fell 3% on Monday.
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However, the end of the exclusivity pact would be a good thing for Rivian. This would allow Rivian to sell commercial vehicles to more than one customer. Amazon is also committed to Rivian in the long run.
“While nothing has changed from our agreement with Rivian, we have always said that we want others to benefit from their technology in the long run because more electric delivery vehicles on the road is good for our communities and our planet, said an Amazon spokesperson. “This is a big part of why we invest in companies like Rivian – both to 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 approximately 17% of the total shares outstanding.
Wedbush analyst Dan Ives said the end of the exclusivity deal would be a potential positive, but noted that doubts remain. Ives said, “It’s a potential win, but right now the Street thinks Rivian can’t walk and chew gum at the same time.” He calls the shares a buy and has a $25 price target.
Rivian has had trouble scaling up its production. Wall Street expected about 60,000 deliveries in 2023. The company directed around 50,000 units.
The stock has also not performed well. Shares are down 26% this year and are off nearly 64% over the past 12 months.
Write to Al Root at [email protected]