Rivian wants more electric truck customers as exclusivity deal with Amazon expires
Amazon-backed electric car maker Rivian said it plans to start selling its battery-powered delivery vehicles to new customers as the initial period of making them exclusively for the retail giant ends. The company is also working to boost its production target of electric pickup trucks, SUVs and pickup trucks in 2023.
The Irvine, Calif.-based company, founded and led by CEO RJ Scargin, will fulfill a plan to deliver 100,000 Rivian commercial trucks to Amazon by 2030 but wants to ramp up additional sales. When announced in 2019, the supply deal was the largest of its kind and secured billions of dollars in revenue for the as-yet unproven startup.
Opening up Rivian trucks 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 have built relationships with a variety of commercial operators,” Scarring said on an earnings call, without naming new buyers.
The plan was announced alongside Rivian’s better-than-expected quarterly results. It posted record revenues of $1.34 billion for the three-month period, slightly better than consensus expectations of about $1.31 billion. This came primarily from deliveries of 15,564 R1T pickup trucks, R1S SUVs and delivery vans. Its net loss was $1.37 billion, down from $1.72 billion a year ago. Loss per share was $1.19, better than the expected $1.32.
The end of Amazon’s exclusive sales “is a positive because it allows (Rivian) to sell more of its higher-margin delivery trucks than its consumer vehicles,” Ben Callow, an equity analyst at Baird, said in a research note.
Although overall electric vehicle sales are slowing in the United States, hurt by rising interest rates and higher prices compared to gasoline-powered models, the company said it is boosting its 2023 production target to 54,000 units, up from 52,000 units. The move “is due to the progress made on our production lines, our internal engine pipeline ramp, and supply chain forecasts,” Rivian said in an investor letter on Tuesday.
Total electric vehicles in the United States reached a record 313,086 units in the third quarter, up about 50% from a year earlier, according to Cox Automotive. However, concerns about a potential economic slowdown and interest rates have prompted companies including General Motors, Ford and Tesla to take steps to slow the pace of their electric vehicle production plans in the near term.
“I think there’s been an overreaction to some of the short- or medium-term headwinds we’re seeing,” Scarring said, citing rising interest rates and geopolitical challenges. “We remain very convinced about the transformation of the entire transportation space.”
Rivian shares rose 1.4% to $17.42 in Nasdaq trading Tuesday, ahead of the earnings announcement. They were up an additional 1.3% in after-market trading.
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