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Amazon and Rivian's exclusive deal for electric vans may not last much longer

Amazon and Rivian's exclusive deal for electric vans may not last much longer

Rivian is looking to opt out of its agreement to exclusively provide delivery vans to Amazon, according to reports from the Wall Street Journal and CNBC. As part of a deal in 2019, the online retailer signed on to buy 100,000 delivery vans from Rivian, but with Amazon reportedly fulfilling orders for a minimum of 10,000 vehicles this year, the two are renegotiating.

The terms of the original deal stated that Amazon would have exclusive rights to the electric delivery vans for four years after Rivian provided the first batch of vehicles, which Rivian began delivering last year. However, the fine print states that Rivian could reduce the exclusive deal if Amazon doesn't buy 10,000 of its vehicles within the first two years after Rivian begins production.

In November, Amazon said it had "over a thousand" electric vans for the company in 100 US cities, including Austin, Boston, Denver, Houston, Indianapolis, Las Vegas, Madison, Newark, New York and others. The vans, which are equipped with features such as 360-degree visibility, exterior cameras and adaptive cruise control, have helped deliver more than 5 million packages so far.

Despite the WSJ report, Amazon says its deal with Rivian remains intact. “While nothing has changed in our agreement with Rivian, we have always said we want others to benefit from their technology in the long run because more electric delivery vehicles on the road is good for our communities and our planet, Amazon spokeswoman Kate Scarpa says in a statement to The Verge.

As a major investor in Rivian, it's in Amazon's interest to see Rivian succeed, which may explain why it's open to talks as its own orders slow. The company's lower-than-expected orders may reflect its more conservative spending after plans to lay off more than 18,000 employees and halt construction of its second headquarters in Arlington, Virginia. Last quarter, the company reported its first net loss since 2014.

If Rivian scraps the exclusivity part of the deal, it could allow the automaker to sell its vans to other companies. Rivian recently shelved its deal with Mercedes-Benz to make electric vans amid an uncertain economy that has laid off hundreds of employees over the past year.

Rivian spokeswoman Marina Norville said in a statement emailed to The Verge, "Our relationship with Amazon has always been a positive one — we continue to work closely together, and like many companies, are navigating the changing economic climate." " "Our relationship with Amazon is very positive."

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