By Rivian Automotive, the electric-vehicle company, has recently made a significant move in its partnership strategy. In collaboration with AT&T, Rivian has announced an electric-vehicle pilot program that will see AT&T commercial-fleet drivers utilizing some of Rivian’s all-electric vans by 2024. This development is particularly noteworthy as it marks Rivian’s ability to sell its vans to third parties, which was previously limited due to an exclusive agreement with Amazon.com.
Hardmon Williams, Senior Vice President of AT&T Connected Solutions, expressed excitement about purchasing Rivian EVs for their fleet, stating that this pilot program is an important step towards sustainability. Williams also commended Rivian for setting the standard in modern transportation.
Following the announcement, Rivian’s stock experienced a 6.4% surge in morning trading, reaching approximately $21 per share. Simultaneously, both the S&P 500 and Nasdaq Composite indexes saw a 0.4% increase, and AT&T shares rose by 1.1%.
Rivian is known for manufacturing various electric vehicles, including the R1T pickup truck, the R1S sport-utility vehicle, and a commercial van utilized by Amazon for package delivery. As an early investor in Rivian, Amazon still holds shares in the company. Previously, Rivian’s exclusive agreement with Amazon limited the sale of commercial delivery vans to the retail giant. However, with the introduction of this partnership with AT&T, Rivian can now expand its customer base beyond Amazon.
Although the exact number of vans delivered by Rivian to Amazon is undisclosed, it is worth noting that Amazon has placed an order for 100,000 vans. Throughout its history, Rivian has produced approximately 65,000 vehicles, primarily trucks and SUVs for everyday consumers.
Furthermore, Amazon announced its intention to purchase electric vans from Dodge (now part of Stellantis) in 2022, which initially resulted in an 11% decrease in Rivian’s stock value. However, the recent partnership with AT&T has contributed to a more than 6% increase in Rivian’s stock value.
Expanding its commercial customer base benefits both Rivian and Amazon. With Amazon controlling approximately 16% of Rivian, any success for Rivian reflects positively on Amazon. However, considering Amazon’s $1.5 trillion market cap and the approximate $3 billion value of its stake in Rivian, the impact on Amazon’s overall financials is relatively small. Notably, Amazon’s stock experienced a modest 0.5% decrease in midday trading.
In conclusion, Rivian’s partnership with AT&T represents a significant milestone, allowing the electric-vehicle company to broaden its horizons beyond its exclusive agreement with Amazon and explore new opportunities in the commercial sector.
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