Rivian Automotive Inc. is ready to take on more commercial partners beyond Amazon.com Inc. after a recent bout of production success.
(Bloomberg) — Rivian Automotive Inc. is ready to take on more commercial partners beyond Amazon.com Inc. after a recent bout of production success.
“What we saw in Q2 is really the beginnings of the supply chain now running in a healthy way,” Chief Executive Officer RJ Scaringe said Wednesday in an interview with Bloomberg Television.
Rivian sells a consumer pickup truck and sport utility vehicle and manufactures a delivery van for Amazon, its largest shareholder and biggest customer. The deal with Amazon is exclusive, but Scaringe said the carmaker is “in the final stages of negotiating, allowing us to sell the vehicle outside of the Amazon relationship to others.”
Shares of Rivian fell 2.2% in premarket trading Thursday to $19.99 as of 9:05 a.m. in New York. The stock was up about 11% this year at the close on Wednesday.
The electric-vehicle company reported quarterly production and deliveries earlier this week that exceeded Wall Street’s expectations, helping to send shares up more than 45% over six trading days. It also reiterated plans to build 50,000 electric cars this year, lower than some internal projections.
“We want to make sure that we over-deliver on our numbers, over-deliver on our targets,” Scaringe said at Rivian’s headquarters in Irvine, California.
Rivian has struggled with manufacturing delays since going public in November 2021. Even with its recent stock boost, shares are still far below the price of its IPO, which was the largest since Meta Inc., then known as Facebook, went public early last decade. A torrid 2022 saw Rivian stock drop 82%.
The company has been able to ease a supply-chain bottleneck in part by developing a new motor in-house known as Enduro. The technology supplements a four-motor design made by Robert Bosch GMBH that has faced lingering backlogs. That has helped it boost output of its R1S electric SUV, which accounts for about 70% of its pre-orders.
“When we sourced the power semis for the inverter in Enduro, we sourced in a really thoughtful way,” Scaringe said. “That gave us enough capacity and confidence around our supply chain.”
Read more: Rivian Surges After Quarterly Production Beats Expectations
The company doesn’t provide production volumes by vehicle type. This quarter, production of the SUV is expected to surpass the pickup. And earlier this week, the company said it had started shipping Amazon’s vehicles to Europe. All output is from a sole facility in Normal, Illinois.
During the interview, Scaringe said the company was guiding that around 20% of its overall production volumes would be vans for Amazon. Rivian’s deal with Amazon commits it to delivering 100,000 electric delivery vans for the e-commerce giant by the end of the decade.
Amazon has taken delivery of and rolled out more than 5,000 Rivian EDV vans so far in more than 800 cities in the US, the e-commerce giant said in a statement on Thursday. It had previously disclosed 3,000 of the vans built by Rivian being operational.
While Rivian’s life as a public company has been short, it has been a long journey for Scaringe, who holds a doctorate from the Massachusetts Institute of Technology. The 40-year-old founded the company in 2009, but went a decade before taking Rivian out of stealth mode when the designs for a pickup and SUV were unveiled. That put it on a pace to be the first company to bring electric-battery powered vehicles for those classes to market.
Read More: Ex-JPMorgan Banker Maps Rivian’s Path to Regain Wall Street Halo
Scaringe has brought in new leaders. Claire McDonough, a former JPMorgan Chase & Co. investment banker, joined as chief financial officer in early 2021. One of her first contributions was to help Rivian to the sixth-biggest listing in US history. Frank Klein joined Rivian from Magna International Inc. to shore up manufacturing and operations as chief operations officer.
(Updates pre-market trading in fourth paragraph; adds Amazon statement on electric vans.)
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