Amazon’s big van order signals Rivian is ‘for real’

Company's chief executive Jeff Bezos announced plans to buy 100,000 electric vans from the American automaker

Rivian introducing its R1T all-electric pickup truck at Los Angeles Auto Show. Reuters

If investments from Amazon and Ford weren’t reason enough to take note of Rivian Automotive, a six-figure order by Jeff Bezos has elevated the electric-vehicle upstart - all before it’s made its first truck or SUV.

The billionaire announced plans to buy 100,000 electric vans from Rivian, custom-built for Prime deliveries, as part of an Amazon environmental initiative designed to meet the goals of the Paris climate accord 10 years early. The deal follows a $700 million investment in Rivian that the online retailer led in February.

The order is a major coup for a company that is aiming to launch its R1T plug-in pickup and R1S sport utility vehicle late next year. While financial terms of the deal weren’t released, Amazon’s purchase positions Rivian with a major customer well before chief executive RJ Scaringe begins to test the waters with consumers who’ve been slow to go electric.

Segment leader Tesla didn’t deliver more than 100,000 vehicles in a year until 2017, almost a decade after the arrival of its debut model, the Roadster.

“It’s a very significant deal,” said Mike Ramsey, an automotive analyst with consultant Gartner. “It means we have a new automaker, for real.”

Amazon will start making deliveries with Rivian vans in 2021. By late the following year, Rivian expects to have 10,000 vehicles on the road, according to Amy Mast, a spokeswoman for the carmaker. The vans will be built at the company’s plant in Illinois, purchased years ago from Mitsubishi Motors.

Amazon’s vehicles will share key components with the R1T and R1S, including the battery, but the vans will have a unique body, interior and software, Ms Mast said.

Two months after Amazon announced its investment in Rivian, Ford said it would inject $500m. Earlier this month, the company took in another $350m from Cox Automotive, the owner of online car-shopping sites Autotrader and Kelley Blue Book and vehicle auctioneer Manheim.

“With the big investments from companies like Ford and Amazon, are we witnessing a new business model for a different kind of company in the auto industry?” Ramsey said of Rivian. “It’s a contract manufacturer that also has its own product.”