Your next Amazon delivery may arrive in silence.
That’s because the massive marketplace on Thursday announced that its custom electric delivery vans from Rivian have officially hit the road in over a dozen U.S. cities, including Chicago, Dallas, Seattle, Baltimore, San Diego and Nashville, Tennessee.
After making the largest EV order ever, which included 100,000 vehicles, in 2019, it appears Amazon (NASDAQ: AMZN) is ready to cash in on its investment. This week, the e-commerce giant said it plans to have all 100,000 vans on the road by 2030. It also anticipates rolling out several thousand EVs in more than 100 U.S. cities by the end of the year.
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Amazon, which owns roughly 18% of Rivian (NASDAQ: RIVN), is touting the rollout as a big step toward meeting its Climate Pledge — a commitment to reaching net-zero carbon across all operations by 2040. The initiative has garnered more than 320 signatories, including Hewlett-Packard, Pepsico, Procter & Gamble and Visa.
“Fighting the effects of climate change requires constant innovation and action, and Amazon is partnering with companies who share our passion for inventing new ways to minimize our impact on the environment. Rivian has been an excellent partner in that mission, and we’re excited to see our first custom electric delivery vehicles on the road,” said Andy Jassy, CEO of Amazon.
Since 2021, Amazon has been testing deliveries with preproduction Rivian vehicles. Rivian secured certifications from the National Highway Traffic Safety Administration, the California Air Resources Board and the U.S. Environmental Protection Agency that allowed it to test its vans in different climates and geographies.
During the testing phase, the EVs delivered more than 430,000 packages and traveled over 90,000 miles.
All of that testing was meant to shore up the key features of the vehicle. Those include an array of sensors, traffic assist technology, automatic emergency braking and collision warnings designed to maximize safety. Inside, the van also includes a dashboard that provides access to routing, navigation and driver support, effectively guiding drivers through each delivery.
To support its new electric fleet, Amazon said it has added thousands of charging stations to its delivery hubs around the country. It also partnered with nonprofit Ceres and several other fleet owners to form the Corporate Electric Vehicle Alliance, a group that aims to accelerate the transition to EVs.
“To say this is an exciting moment is an understatement — we’re thrilled to see this partnership has kick-started decarbonization projects across the logistics delivery industry,” said RJ Scaringe, CEO of Rivian.
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Still, some questions remain about Rivian’s ability to hold up its end of the deal. Once the darling of the EV world, its stock has tumbled to below its IPO price. The company has had trouble scaling up production of its R1T and R1S vehicles, cutting its 2022 production forecast in half this past March. It said that supply chain constraints would limit it to just 25,000 vehicles, including some of Amazon’s custom vans.
So far, Rivian has delivered a few hundred EVs to Amazon, with the expectation that thousands will be delivered by year’s end. In October 2020, Ross Rachey, director of global fleet and products at Amazon, placed the number at around 10,000. But as Rivian juggles ramping up production of its own vehicles with fulfilling Amazon’s tall order, it may fall short.
Luckily for Amazon, Rivian isn’t the company’s sole supplier. In January, it signed a deal with another EV maker, Stellantis, to purchase some of the company’s battery-electric Ram ProMaster vans. It also ordered 1,800 vans from Mercedes-Benz in August 2020.
Other large retailers have also gotten in on the EV craze. Earlier this month, Walmart (NYSE: WMT) placed an order for 4,500 vehicles from Canoo, which until recently had been struggling to survive. The big carriers are also getting involved, with both FedEx (NYSE: FDX) and the U.S. Postal Service committing to electrifying portions of their fleets.
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