Amazon is set to hit the road in Chicago and across the US with the first of its custom-built Rivian electric delivery vans, and both companies may have a lot at stake.
Rivian CEO and founder RJ Scaringe and top Amazon executives were on hand Thursday afternoon to introduce the electric vans at an Amazon delivery station on South Woodlawn Avenue in the Pullman neighborhood on Chicago’s South Side. , where the packages will be loaded to be delivered to the doors.
“We’re going to put a lot more of these on the road,” Scaringe said, sitting in the driver’s seat of a road-ready EDV 700 electric pickup. “And we’re going to start to see, hopefully, in every neighborhood in every city in the US, these deliver their packages.”
However, the delivery of the electric vans is being delayed.
Amazon, an early investor in Rivian, has ordered 100,000 electric delivery vans from the EV truck maker, which has struggled with a slower acceleration than expected since launching production in September from a converted Mitsubishi plant in southern Normal state. In addition to commercial trucks, Rivian has more than 90,000 consumer orders for its R1T truck and R1S SUV.
When the Amazon deal was announced in 2019, the online retail giant hoped to have its first Rivian electric delivery vans on the road by 2021, with 10,000 delivering packages by the end of this year. Amazon still plans to have all 100,000 EDVs in service by 2030.
The electric delivery vans will launch in more than a dozen cities, including Chicago, Baltimore, Dallas, Kansas City, Nashville, Phoenix and St. Louis, with “thousands” of vehicles in more than 100 cities by the end of the year. Amazon said Thursday.
The trucks come in two models, the EDV 700 and the smaller EDV 500, and are an integral part of Amazon’s climate commitment to reach net zero carbon emissions by 2040. Amazon is projected to reduce carbon emissions by 4 million metric tons per year by 2030, when the entire fleet of 100,000 electric delivery vans is on the road.
Udit Madan, Amazon’s vice president of Last Mile Delivery, said the company is happy with progress on the ambitious electric van launch.
“When we started in 2019, we started with a sketch,” Madan said Thursday. “We didn’t know there was going to be a pandemic, we had no problems with the supply chain. And considering all of that, I think this has been a remarkable piece of work to move forward at this speed, and at speeds not normally known in the auto industry.”
Features include a large windshield, exterior cameras that offer a 360-degree view, hands-free navigation guidance, and an automatic bulkhead door that opens and closes the cargo area when the driver stops and starts the truck. Amazon has been testing deliveries with pre-production vehicles since last year, delivering more than 430,000 packages and logging more than 90,000 miles, the company said.
While Madan touted the arrival of the first electric delivery vans as a “huge milestone,” the company has much more at stake in Rivian’s success than meeting its 100,000-vehicle order. The online retail giant owns more than 162 million Rivian shares, or 18% of the company, according to filings with the Securities and Exchange Commission.
Rivian, which expects to build 25,000 consumer and commercial electric vehicles this year, still has a long way to go to complete Amazon’s order.
The Normal plant has an annual production capacity of 150,000 vehicles and was projected to build 50,000 by 2022, before global supply chain issues, including an ongoing shortage of semiconductors, halved the project’s target. first year. Earlier this month, Rivian announced that it had produced 4,401 vehicles in the second quarter, up from 2,553 in the first quarter.
Amazon electric delivery vans it accounted for about a third of the nearly 8,000 electric vehicles produced during the second quarter, the company said.
When Rivian went public in November, investors were betting the electric vehicle startup would become the Tesla of trucks, pushing its valuation above $100 billion. But the shares, which peaked at $179.47 in mid-November, have fallen sharply this year amid the slow acceleration, closing at $34.13 a share on Thursday and trimming Rivian’s market cap to about 30,000 million dollars.
California-based Rivian, which has about 6,000 more employees at its Normal plant and 14,000 overall, is “halting certain non-manufacturing hiring” and cutting expenses as it realigns the organization to support “sustainable growth,” it said. Scaring the employees in a memo to all staff. shipped earlier this month.
“The hardest part of this process has been working across our organization to assess the size and structure of our teams and how well it aligns with our strategic plan,” Scaringe said in the memo. “Our team is the core of Rivian and we are working to be as considerate as possible when considering any reductions.”
There are no plans to downsize the manufacturing workforce at Normal, according to Scaringe’s memo, and ramping up R1 and Amazon EDV was listed as the number one job for the company.
Delivery stations are the last stop in Amazon’s shipping process, where packages from fulfillment centers are sorted and loaded onto vans for delivery to customers. Amazon has 20 fulfillment centers and 20 delivery stations in Illinois. Charging stations are being installed to support the rollout of the electric delivery vans, the company said.
In December, dozens of employees at two Amazon delivery stations in the Chicago area went on strike to demand higher wages and better working conditions, halting operations just days before Christmas.
At least one Amazon driver on Thursday seemed excited about the new electric delivery vans, dozens of which were connected to charging stations in the parking lot, baking in the sun as temperatures hit 90 degrees in the early afternoon.
In addition to features such as high-tech video head-up screens that include preprogrammed route maps and delivery schedules, Darin Watkins, who works at the South Woodlawn Avenue delivery station, appreciated the solid air conditioning and the driver’s seat with temperature control, which are standard on the new EDV.
“I love driving these trucks,” said Watkins, 29, of Chicago. “The seats are very comfortable. And on top of that, they give us heated and air-conditioned seats. You can’t beat it.