Amazon to purchase 100,000 electric delivery vans from Rivian

Amazon's new electric delivery van from Rivian is cleaning up two-day delivery.
Image: Twitter | Amazon

On Thursday, Amazon founder Jeff Bezos announced a new initiative to reduce his firm’s carbon emissions. As part of the program, the corporation is going to make its supply chain a lot more environmentally friendly. The e-commerce giant has ordered 100,000 electric delivery vans from a startup called Rivian.

Amazon’s New EV Delivery Fleet

Last year, Amazon noted that it shipped more than five billion Prime orders in 2017. As the e-commerce giant is continuously looking to expand its operations, it needs a vast logistics infrastructure to facilitate growth. The corporation’s order from Rivian will go a long way to ensure its supply chain won’t be harming the world’s air quality while making two-day deliveries.

At the climate change event, Bezos said that Amazon’s new electric delivery fleet will be on the road by 2024. However, the startup’s emission-less vans will be bringing packages to customers before then. The executive notes that Rivian will have prototypes ready by 2020 and the electric vehicles (EV) will be transporting orders by 2021.

Though Bezos didn’t show his company’s new delivery EVs, Amazon Senior Vice President Dave Clark tweeted out a rendering of the unnamed van.

How Rivian Won Amazon’s Business

While the electric vehicle space has become increasingly crowded since Tesla’s ascent, Rivian has distinguished itself from the crowd. Founded in 2009, the Plymouth, Michigan-based startup debuted its first EVs in late 2018. The R1T is a pickup truck that can go 400 miles per charge and reach 60 miles per hour in three seconds. Moreover, its R1S has a maximum range of 410 miles and 750 horsepower.

Notably, both of Rivian’s consumer EVs come equipped with features that allow them to drive themselves to some degree. The startup’s innovative technology interested Amazon as it led a $700 million funding round for Rivian last year. Now it seems that the firm has impressed the corporation enough to buy an entire delivery fleet.

Possible Production Challenges

It’s worth noting that for all its investor confidence, Rivian has yet to sell a single vehicle. The startup is currently accepting preorders for its pickup truck and SUV, but neither will be available until 2020. With its 100,000 unit order, Amazon will put the firm’s production capacity through an incredible stress test.

In the past, other EV makers have had difficulty fulfilling large orders. In April, The Verge reported on Tesla’s inability to meet the demand for its vehicles because it couldn’t get enough batteries to the production line.

On the other hand, Rivian might be able to mitigate some of its sourcing and production issues thanks to its prior partnerships. Five months ago, the company received a $500 million investment from Ford. As part of the transaction, the carmaker gained access to the startup’s designs for use in its EV production. Furthermore, earlier this month, Rivian inked a $350 million deal with Cox Automotive.

The electric vehicle company could leverage those relationships to ensure that it meets its commitment to Amazon. Rivian certainly has the incentive to make good on its new production deal. If the startup becomes Amazon’s go-to delivery vehicle supplier, it will likely see great success as a major player in the commercial automotive sector.