Amazon and Rivian Automotive are currently discussing renegotiating the exclusivity agreement of their electric-van contract after the online retailer’s order for 2023 came in at the low end of a previously promised range.
As per the conditions of a 2019 deal, Rivian must sell all of the vans it produces to Amazon. But, Amazon recently informed Rivian that it intended to purchase roughly 10,000 vans this year, which was the low end of a range Amazon had originally disclosed to the automaker, according to the sources.
In response, Rivian attempted to get the exclusivity clauses removed so that it could sell its delivery trucks to other clients. They claimed that discussions were still ongoing.
According to an Amazon representative, the business is still committed to purchasing 100,000 vans from Rivian by 2030, as specified in the original contract. Rivian continues to be a crucial partner for Amazon, and is enthusiastic about the future, the spokesperson said.
Officials from both companies have praised the agreement, which offered Amazon a crucial piece of its plan to reduce carbon emissions while giving Rivian an anchor customer. According to FactSet, Amazon is Rivian’s largest shareholder, with a 17% stake in the business. Amazon also sits on the company’s board of directors.
Following a spike in e-commerce sales during the pandemic, Amazon has been cutting costs since 2022. One of the largest workforce cutbacks among technology businesses, the corporation has said it will halt building on its second headquarters in the Washington, D.C., area and fire more than 18,000 employees.
The Amazon deal has ensured consistent demand for one of the three cars that Rivian manufactures at its facility in Normal, Illinois. Rivian would have to find new commercial customers for the vans if Amazon agreed to dissolve the exclusivity agreement.
