Rivian Automotive is the name of the company. ( RIVN -4.00% ) Stocks were declining on Friday afternoon following an unexpected statement from the company. Although much attention had been on the electric vehicle (EV) manufacturer’s new SUV, the latest announcement concerned its commercial delivery vans.
Stocks dropped by up to 5.5% following the announcement that the company has halted the manufacturing of the vans intended for the major online retailer. Amazon Although the stock recovered some of its losses, it was still trading down by 4.3% at 2:30 p.m. ET.
Rivian’s substantial electric vehicle purchase
Amazon has committed to purchasing 100,000 electric delivery vans from Rivian to be delivered by the end of the decade. By the end of last year, Amazon had already added 10,000 Rivian vans to its delivery fleet. In addition to being a customer, Amazon is also an early investor in Rivian, holding almost 160 million shares, which is equivalent to over 16% ownership in the company as of April 29th.
Today, Rivian made an announcement that it had to halt the production of the electric Amazon vans temporarily because there was a lack of parts available. The company did not mention which specific part or supplier was causing the production stoppage. A spokesperson from Rivian sent out an email stating that the production of their Electric Delivery Van (EDV) has been temporarily affected due to a shortage of parts. They anticipate that they will be able to make up for the missed production in the future.
In 2023, Amazon’s purchases accounted for approximately 19% of Rivian’s total revenue. However, Rivian reassured that the production of its consumer pickup truck and SUV remains unaffected by the shortage of parts. This development is not a concern for investors and may even present a potential opportunity for those looking to invest in Rivian’s shares. a share price that is slightly lower than the original price .
