Amazon orders 100,000 electric vans from Rivian, can Rivian meet the ambitious production goals
Amazon.com, Inc. (AMZN) CEO Jeff Bezos announced last week that the company is putting their electric vehicle partner Rivian Automotive to a lot of work with a giant order for 100,000 fully electric delivery vans.
During the press conference, Bezos also shared the concept renders of the environmentally friendly van that will be used to make zero-emissions deliveries to Amazon customers.
Amazon has a huge shipping task of 10 billion deliveries each year, by converting their delivery vehicles to electric, the company’s carbon footprint will reduce by epic proportions, it is gratifying to see the richest man on earth (Net worth: $131B) taking sustainability so seriously.
The intentions behind Amazon’s $700 million investment in Rivian earlier this year has finally started to unfold, but with a huge pressure of mass production of the Amazon’s 100,000 electric vans might deviate Rivian from it’s original path i.e. being the first ‘electric adventure vehicle’ manufacturer.
Amazon has also committed to fulfilling the Paris Climate Accord 10 years earlier in 1930 than the original deadline — during the Jeff Bezos’ presentation, he announced that the company currently uses 40% of its energy needs from renewable energy sources.
According to Bezos, the E-commerce giant has 15 utility-scale wind and solar farms and 51 solar installations on their buildings, additionally Amazon released a blog post named The Climate Pledge stated:
By joining The Climate Pledge and agreeing to decarbonize on a faster time horizon, signatories will play a critical role in stimulating investment in the development of low carbon products and services that will be required to help companies meet the pledge. Amazon’s previously announced investment in Rivian is an example of this. Rivian is a producer of emissions-free electric vehicles with its headquarters in Plymouth, Michigan and a manufacturing plant in Normal, Illinois. The $440 million investment will accelerate the production of electric vehicles critical to reducing emissions from transportation. To further advance this goal, Amazon today announced the order of 100,000 electric delivery vehicles from Rivian, the largest order ever of electric delivery vehicles, with vans starting to deliver packages to customers in 2021. Amazon plans to have 10,000 of the new electric vehicles on the road as early as 2022 and all 100,000 vehicles on the road by 2030—saving 4 million metric tons of carbon per year by 2030.
Although this gives Rivian a huge project and financial security for several years into the future, I fear that there will be a delay in taking the Rivian R1T Pickup Truck and R1S SUV towards production (originally due late 2020), because Rivian has not gone through mass production challenges as yet.
If scaling Model 3 production can put Tesla through a ‘production hell’ with previous manufacturing experience of the Model S and X, Rivian has a lot to go through before they will truly rise as an automotive company.
However, Rivian has also got Ford on their back with a $500 million investment and 100+ years of experience in auto manufacturing, Rivian should be able to leverage that to achieve their production goals.
Rivian Automotive is the 2nd notable player in the electric vehicle design and production arena in the United States after Tesla (TSLA) — the startup has received around $1.5B of investment capital this year from Amazon, Ford and the latest from Cox Automotive ($350 million), hopefully, Rivian will rise in the near future!
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