Electric vehicle startup Rivian Automotive has ended its exclusivity agreement with Amazon for the production of electric delivery vans, according to a report published Tuesday.
Rivian originally signed a deal in 2019 to provide Amazon with 100,000 electric vans over 10 years. The deal granted Amazon exclusive rights to purchase Rivian’s vans for four years. However, Amazon has only ordered about 10,000 vehicles so far, much lower than originally planned.
With the exclusivity provision now removed, Rivian is free to sell its electric vans to other companies besides Amazon. Rivian has reportedly already begun talks with several potential new customers.
Ending the exclusivity clause benefits both Rivian and Amazon. For Rivian, it opens up new revenue streams and expands its customer base beyond just Amazon. For Amazon, it provides more flexibility in procuring electric vehicles for its delivery fleet from multiple suppliers.
It is unclear how many vans Rivian aims to sell to third party customers at this point. But the additional business could help the startup scale up production and achieve profitability sooner.
Rivian has struggled with production delays and rising costs since its IPO last year. Opening up van sales to new customers helps the company on its path to ramping up manufacturing. For Amazon, expanding Rivian’s customer base helps ensure stability in the supply of electric vans critical for its carbon neutrality goals.
The end of Rivian’s exclusivity clause marks a new phase in the partnership between the EV startup and the e-commerce giant. It also reflects the rapid evolution of the electric vehicle market, as new players emerge to challenge first movers like Rivian.
