Shares of Rivian Automotive plunged below the IPO price, coming in to score almost -50% from the highs of November 16, 2021. Rivian had caused a sensation at its debut on Wall Street, reaching more than 100 billion dollars in the first part of November, with capitalization higher than that of giants such as GM and Ford.
Amazon move displaces investors
To give a bearish push to the stock was the move of Amazon, one of Rivian’s largest investors, which on Wednesday announced the start of a collaboration with Stellantis and this news sent Rivian shares down 14% in two sessions.
The Amazon-Stellantis agreement involves the development of cars and trucks with Amazon’s software, while the auto group will distribute electric vans to implement Amazon’s delivery network.
Rivian signed a contract in 2019 to produce 100,000 electric vans for Amazon by 2025, but now the electric commercial vehicle business, a vital market for Rivian, is becoming increasingly crowded. In fact, the General Motors group recently signed agreements with Walmart Inc and FedEx Corp for the delivery of electric vehicles, while Ford Motor is expected to deliver its E-Transit cargo van to customers by the end of the year.
Rivian yesterday reiterated that its partnership with Amazon is intact and that it was already expecting Amazon purchases of vehicles from many suppliers. An Amazon spokesperson, in a statement to CNBC on Wednesday, reiterated the company’s support for Rivian. “We have always known that our ambitious sustainability goals in our last mile operations would require more suppliers of electric vans,” the spokesperson said in a statement. “We continue to be excited about our relationship with Rivian and that doesn’t change anything in our investment, partnership, order size and timing.”
Rivian shows confidence
Rivian, through a spokesperson, is not worried about the Amazon-Stellantis agreement and says that “Large fleets focused on electrification and carbon neutrality represent a victory for both companies’ mission. Amazon’s scale is unprecedented globally and we expect them to purchase vehicles from many suppliers – our partnership with them is intact, thriving and growing. “
Rivian is expected to start delivering cars to customers this year. Production at its second facility in Georgia, in which it has invested $ 5 billion, is expected to start only by 2024.
Detroit giants push on EV
The growing investment in electric by traditional auto giants is also making itself felt. General Motors Co this week unveiled its Chevrolet Silverado electric pickup, while Ford said it is ramping up production of the F-150 Lightning. Both pickups would compete with theR1T by Rivian at a time when it is struggling to stick to delivery dates due to chip supply constraints.
Shares of Ford have risen 18% YTD and have been traveling to the top since 2001. GM has gained 7% since early 2022.