Rivian’s custom electric delivery van is embedded with state-of-the-art safety sensors, automatic emergency braking, 350-degree visibility and seamless navigation that guides an Amazon driver to the next address while displaying customer information on its large touch screen.
The automaker has promised to deliver 100,000 of these electric vehicles to Amazon by the end of the decade, the virtual commerce company said in a press release.
Meet Amazon’s newest delivery vans
These deep-blue vehicles, which feature “light, resilient and low cost” batteries, will soon hit the road across the United States in cities like Baltimore, Chicago, Dallas, Kansas City, Nashville, Phoenix, San Diego, Seattle and St. Louis. The companies’ partnership began in 2019, when Rivian became the first to join Amazon’s Climate Pledge to reach net zero by 2040.
“Fighting the effects of climate change requires constant innovation and action, and Amazon is partnering with companies who share our passion for inventing new ways to minimize our impact on the environment,” said Andy Jassy, CEO of Amazon.
“Rivian has been an excellent partner in that mission, and we’re excited to see our first custom electric delivery vehicles on the road,” he said, adding that the vehicles are “among the safest and most comfortable delivery vehicles on the road today.”
Rivian faces production obstacles
While the initiative sounds great, the rollout has faced many challenges. For starters, Rivian had originally planned to produce the 100,000-vehicle fleet by 2024, not 2030.
After a version of the van debuted in fall 2020, the testing brought back concerning results — drivers claimed that the batteries drained far too quickly when the heating or cooling was on, which threatened the vehicle’s 150-mile driving range, and it took roughly an hour to recharge, according to a report by The Information.
Rivian’s quarterly earnings, released in March, also bore disappointment with missed revenue projections and reduced vehicle production — the company was expected to produce 50,000 electric vehicles in 2022, including vans for Amazon, and the number was later slashed to 25,000, CNBC reported at the time.
The lower number can be attributed to the supply chain issues automakers have faced during the COVID-19 pandemic. Automakers have experienced shortages of chips and wire harnesses, according to Motorbiscuit.
Does the math add up?
When you combine the existing 90,000 reported reservations for Rivian’s R1-series pickup trucks with Amazon’s huge order of vehicles, it seems as though the EV producer will have an extended backlog.
In June, Rivian founder and CEO Robert Joseph “RJ” Scaringe tweeted, “Supply chain and production are ramping!” He added that production is “on track” to reach the year’s goal.
But then earlier this month, the automaker told employees that it was planning to lay off 5% of its workforce as it prioritizes vehicle manufacturing while ramping up charging infrastructure, optimizing costs and upgrading its existing models. However, layoffs have not yet taken place.
“Rivian’s production problems are symptomatic of the difficulties that young electric vehicle manufacturers face as they try to challenge the traditional automakers,” wrote business reporter Jack Ewing and technology correspondent Karen Weise for The New York Times. “Many are discovering how difficult and costly it is to mass-produce vehicles, and time is not on their side because the established companies are also moving quickly toward electrification.”
For reference, Rivian’s competitor Tesla delivered 184,800 EVs and produced 180,338 cars in 2022, amid similar production delays that the former faced.
The party goes on
Rivian has been seen as a promising EV maker — its pickup truck was even awarded the title of Truck of the Year by MotorTrend in 2022. Now, its shares are down to $35, compared to its initial public offering price of $78 a share late last year.
Amazon, which delivered about six billion packages in the U.S. in 2021, expects 10,000 vans from Rivian this year alone. “Bringing electric delivery vehicles to the road at the scale and speed” isn’t a “small feat,” as Amazon Spokesperson Natalie Banke pointed out in an email. But so far, Rivian has only delivered a few hundred. It may take the automaker a while before it fulfills the big electric van order.
Although Amazon is “proud” and “thrilled” to partner with Rivian, as Banke said, it is expanding its reach — the company announced it will be buying thousands of Ram’s electric vans as it installs charging stations at delivery depots across the U.S.