Rivian Is Spreading Its Wings Beyond Amazon

Rivian Automotive Inc RIVN commited to deliver 100,000 electric vans to the e-commerce titan Amazon.com Inc AMZN. But as of November, Rivian and Amazon are no longer in an exclusive relationship, allowing Rivian to sell its electric fleet to others. Today, Rivian revealed its first deal after getting out of the exclusivity clause with Amazon, and it is with AT&T Inc T. But, what is good for Rivian is also good for Amazon as besides being a client, it is also an owner of a 17% stake in the EV startup.

AT& T Turns To Rivian As Part Of Its Sustainability Strategy

AT&T has embarked on a journey of lowering costs and cutting carbon emissions, along with improving safety. Although neither Rivian nor AT&T disclosed the exact number of vehicles AT&T decided to purchase nor the financial terms of the deal, they did reveal AT&T will be enriching its fleet with Rivian’s electric commercial vans, R1T pickup trucks, and R1S sport utility vehicles early next year. For a while now, AT&T has been transforming its commercial fleet for its vehicles to use alternative fuels such as compressed natural gas. 

Rivian Is Enjoying Increased demand

Although Rivian stated it is seeing plenty of interest and demand for its electric vehicles after getting out of the exclusivity agreement it had with Amazon, it did not disclose its potential customers. But last month, the EV startup lifted its overall 2023 production target to 54,000 units. Rivian confirmed it will be fulfilling its commitment to Amazon that involves delivering 100,000 electric vans by the end of the decade. Back in October, it revealed it has 10,000 of those vehicles across the U.S. and Europe.

Intensified Competition Could Also Present An Opportunity... 

Although Rivian was the first EV maker to bring the electric pickup to the road, the EV king, Tesla Inc TSLA just released its long-anticipated Cybertruck. With its futuristic approach that promises to redefine the concept of electric pickups, Tesla is set to challenge Rivian, as well as the iconic Ford Motor F who was hoping to score on the EV front with the electric version of the best-selling Ford F-150, the Lightning. But, even the legendary automaker like Ford faced a harsh EV reality. Earlier this week, Ford halved its F-150 Lightning production forecast due to challenging market demand. Besides the costs and consequences of the UAW strike, Ford needed to face a demand slowdown.  Ford has been the latest automaker to scale back its EV ambitions due to sales being weaker than expected. Automotive News reported that Ford now expects to manufacture 1,600 of the EV pickups per week at its Rogue EV center in Michigan. However, even Tesla acknowledges the challenging macroeconomic environment as it entered 2023 by lowering prices and initiating a price war. Considering that Tesla approached the electric pickup concept with a starting price of $79,990 and a very unique design that greatly differs existing models, the Cybertruck could actually be an opportunity in disguise for Rivian. Although Rivian had quite a few bumps on the road and increasing production will certainly make profitability even more challenging, it did deliver a pleasant surprise to Wall Street with a better-than-expected third-quarter revenue, unlike Tesla whose third quarter results fell short of estimates. 

DISCLAIMER: This content is for informational purposes only. It is not intended as investing advice.

This article is from an external contributor. It does not represent Benzinga's reporting and has not been edited for content or accuracy.