Fate of Rivian’s electric truck hinges on Amazon deal
https://www.seattletimes.com/business/rivians-electric-truck-gets-all-the-attention-but-its-fate-is-tied-to-amazon/
It was September 2019. ... “I am incredibly excited to announce that we
have just placed an order for 100,000 electric delivery vans,” Bezos,
then-chief executive officer of Amazon, told the stunned crowd. “They
will be built by a company called Rivian.”
...
Last week, Rivian shared new details of the Amazon deal in a filing with
the U.S. Securities and Exchange Commission, revealing how closely its
fate is tied to one of its biggest benefactors. The e-commerce giant
will have exclusive rights to Rivian’s delivery vehicles for four years
after receiving its first one, and it gets right of first refusal to buy
the vans for two years after that.
...
Rivian started to take preorders for the consumer vehicles at the LA
show. Potential customers have put down a refundable $1,000 deposit to
buy 48,390 R1T and R1S models. By comparison, Ford already has surpassed
150,000 nonbinding reservations for its F-150 Lightning.
...
Due diligence by Amazon followed and in the late fall of 2018, Bezos
flew to Rivian’s engineering facility in Plymouth, Michigan, and met
with Scaringe. The Rivian founder presented a detailed document: his
vision for an electric future. Throughout Amazon’s search for an
electrified fleet, a particular sticking point was just how expensive it
would prove to mass-produce the electric vans, according to a person
familiar with the matter. Until that point, Bezos and Amazon had found
no company that could build a battery-powered van at scale. Now he had.
...
Scaringe had built two lines of business: one reliant on a just-in-time
delivery empire and the other on environmentally conscious consumers.
The vans for Amazon would deliver steady revenue, while the SUVs and
trucks try to keep their momentum in a fickle retail market far more
sensitive to economic conditions.
...
Rivian’s most immediate goal is to deliver 300 vans to Amazon by
year-end, according to people familiar with the deal. The first 10,000
units are due by the end of 2022. The full order of 100,000 vans is due
by the end of the decade. The vans, in different configurations, are
principally for last-mile delivery. Each will have a range of up to 150
miles on a charge.
...
Meanwhile, Rivian’s contractual requirements for Amazon may simply be an
opening bid. Bezos, as he looks toward future orders, has set up a kind
of bake-off (as he is known to do). In addition to Rivian, Amazon
currently buys vans from Ford, Stellantis and Daimler, all companies
that are quickly flipping the switch on electric models.
...
PitchBook analysts forecast the total Amazon order could bring more than
$4.5 billion to Rivian and, more importantly, additional commercial
customers.
...
Amazon currently is testing a handful of preproduction vans in cities
across the U.S. And Bezos is no longer at the helm. He stepped down from
the CEO’s perch in July and has been devoting time to his rocket company
Blue Origin. Mere minutes before blasting himself into space in July,
with much of the world watching, Bezos drove to the launchpad in a
Rivian SUV. After touching back down to earth, his capsule was swarmed
by vehicles — all Rivian pickups and SUVs, each of them shiny and dusty.
--------
Peri
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