News & Analysis

Is the paint already off Rivian?

Andrew Saks, Friday, 7 January 2022

Rivian was recently the stock market star when the still unknown company dared an IPO. The market capitalisation directly rose far above the value of Volkswagen, BMW, Mercedes or Ford. This is particularly remarkable as Rivian is an electric truck start-up that has not yet sold any vehicles.

After the IPO, Rivian shares rose to over USD 170, but now they have fallen to a low of under USD 80. That was even below the issue price. Why did the paint come off so quickly?

The trigger for the crash was Amazon again. At the time of the IPO, Rivian proudly announced that Amazon had placed an order for 100,000 electric trucks. A bulging book full of orders fires the imagination of investors. Amazon has not only filled Rivian's order book. It also one of Rivian's largest shareholders.

Now Amazon has also announced it is also buying electric delivery trucks from Stellantis. Among others, the Italian-American company Fiat-Chrysler is behind Stellantis. Amazon wants to buy the Stellantis Ram Pro Master from 2023.

Until now, the market among car manufacturers for electric vehicles has been clear. Especially in private vehicles, there was only Tesla for a long time and slowly the traditional car companies are following suit.

For delivery vehicles, there are not yet many alternatives, but the current developments show that the battle for market share for electric vehicles is being fought very hard. General Motors has also just introduced a new vehicle. An electric version of the popular pick-up F 1-150, the so-called Lightning. Ford wants to push production aggressively.

It is still unclear how many vehicles Stellantis will deliver to Amazon, but the company is very optimistic that the order could surpass that of Rivian. In return, Stellantis plans to adopt Amazon's AWS cloud service as its preferred technology solution for the cloud.

One hand washes the other, and Rivian naturally assumes that Amazon is big enough to benefit several e-truck manufacturers.

 

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