Rivian Wants More Electric Van Customers As Exclusive Deal With Amazon Ends

Amazon-backed electric vehicle maker Rivian said it plans to start selling its battery-powered delivery vehicles to new customers as an initial period of making them exclusively for the retail giant concludes. The company is also boosting its production target for electric pickups, SUVs and vans in 2023.

The Irvine, California-based, company founded and led by CEO R.J. Scargine, will fulfill a plan to deliver 100,000 Rivian Commercial Vans to Amazon by 2030 but wants to drum up additional sales. When it was announced in 2019, the supply deal was the biggest of its kind and ensured billions of dollars of revenue for the then-unproven startup.

Opening up the availability of Rivian vans to other companies “has been part of our plan with Rivian from the beginning,” Udit Madan, Amazon’s vice president of transportation, said in an emailed statement.

“We’ve been building relationships with a diverse set of commercial operators,” Scaringe said in an earnings call, without naming new buyers.

The plan was announced along with Rivian’s better-than-expected quarterly results. It reported record revenue of $1.34 billion for the three-month period, slightly better than a consensus expectation of about $1.31 billion. That came mainly from deliveries of 15,564 R1T pickups, R1S SUVs and delivery vans. Its net loss was $1.37 billion, down from $1.72 billion a year ago. Its loss per share was $1.19, better than an expected $1.32.

The end of exclusive sales to Amazon is “a positive as it allows (Rivian) to sell more delivery vans which carry a higher margin than its consumer vehicles,” Ben Kallo, an equity analyst for Baird, said in a research note.

Though overall EV sales are cooling in the U.S., hurt by higher interest rates and higher prices than gasoline-powered models, the company said it’s boosting its 2023 production target to 54,000 units, up from 52,000. That move is “due to the progress experienced on our production lines, the ramp of our in-house motor line, and the supply chain outlook,” Rivian said in an investor letter on Tuesday.

Total U.S. electric vehicles reached a record 313,086 units in the third quarter, up about 50% from a year earlier, according to Cox Automotive. Still, concerns about a potential economic slowdown and interest rates have led companies including General Motors, Ford and Tesla to take steps to slow the pace of near-term EV production plans.

“I think there is an overreaction to some of the short- or medium-term headwinds we see,” Scaringe said, citing high interest rates and geopolitical challenges. “We remain deeply convicted around the transition of the entirety our of transportation space.”

Rivian shares rose 1.4% to $17.42 in Nasdaq trading on Tuesday, before the earnings release. They ticked up an additional 1.3% in after-market trading.