Rivian (RIVN) Seeks to End Exclusivity Deal with Amazon Amidst Disappointing Sales

Rivian (RIVN) Seeks to End Exclusivity Deal with Amazon (AMZN) Amidst Disappointing Sales

Rivian, an electric vehicle automaker, is reportedly seeking to end its exclusivity agreement with Amazon. The Wall Street Journal and CNBC have reported that the deal, signed in 2019, committed Amazon to purchase 100,000 delivery vans from Rivian, but with Amazon only ordering the minimum requirement of 10,000 vehicles this year, the two parties are renegotiating.

While it was previously reported that Amazon had exclusive rights to the electric delivery vans for four years after Rivian provided the first batch of vehicles, the fine print of the original deal allows Rivian to end the exclusivity clause if Amazon fails to purchase 10,000 of its vehicles in each of the first two years of production. Rivian spokesperson Marina Norville has denied the accuracy of the terms of exclusivity in a 2021 article but has not provided any further information.

Despite the reports of Rivian seeking to end the exclusivity agreement, Amazon maintains that the deal remains in place. The company has expressed its interest in seeing Rivian succeed and has invested heavily in the automaker. Rivian’s lower-than-expected order from Amazon could be due to the online retailer’s conservative spending following layoffs and a net loss reported last quarter.

If Rivian is successful in scrapping the exclusivity clause, it would be able to sell its electric delivery vans to other companies. However, the automaker has put its deal with Mercedez-Benz to build electric vans on hold due to the uncertain economy and layoffs that have occurred within the past year.

Rivian and Amazon have expressed that their relationship remains positive and they continue to work closely together while navigating a changing economic climate.

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