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Last week, Amazon announced it was buying electric vans from Stellantis, a company formed last year from the merger of Fiat Chrysler and PSA Group. This was a little confusing for the market since the e-commerce giant has a big stake in the newly listed Rivian Automotive, which already has a mandate to build electric vans for Amazon.
The Rivian share price dropped like a stone on the day, as the market assumed that perhaps Amazon doesn't have confidence in Rivian vans or that Rivian currently doesn't have the production capacity to meet Amazon's immediate demand, at least for the next couple of years.
Rivian is sitting on a $12 billion cash pile raised from its IPO last year which they plan to spend on new production facilities. Just like Tesla in the early days, Rivian is chasing a big order book (including the initial 10 000 vans due to Amazon) which keeps getting bigger. But they are yet to produce the first batch of EVs.
