Rivian was having a tough week in the stock market. Is the future of the Amazon electric car in danger?

Despite production delays and market disruption, Amazon is still counting on electric vehicle startup Rivian to help it meet ambitious climate goals and put tens of thousands of electric delivery trucks on the road.

Rivian runs a simple operation: CEO RJ Scaringe said the number of vehicles it produced this quarter was almost exactly equal to its number of semiconductors.

Those tight margins were scaring investors, a panic that culminated Tuesday when Ford announced it was selling 8 million shares in Rivian, and began severing ties with the California-based company that promised to help transition to carbon-neutral transportation. . Ford still owns approximately 94 million shares.

The announcement sent Rivian stock down 20%, but that downturn was short-lived. It rallied over the next two days, after a call with investors on Wednesday in which Scaringe kept the worst supply chain constraints behind. He said Rivian will start ramping up production for the rest of the year, and the company has registered more than 90,000 pre-orders.

As for Amazon – one of Rivian’s biggest contributors – feel free.

Amazon saw its investment in the company paying off at the end of 2021, when it reported a gain of about $12 billion from Rivian’s initial public offering. but that I felt like falling This year, it posted a $7.6 billion loss of investment in the first three months of 2022.

With 150 million shares and 100,000 electric delivery trucks ordered, Amazon is using Rivian vehicles to help it achieve its goal of zero net carbon emissions by 2040. So far, Rivian’s turbulent stock price, driven by production delays and supply chain uncertainty, Researchers, analysts and company executives say there’s no reason to question this goal.

“Rivian is an important partner for Amazon, and we’re excited about the future,” Amazon spokeswoman Kate Scarpa said Friday. “Putting 100,000 electric delivery vehicles on the road by 2030 is no small feat, and we remain committed to working with Rivian to make that a reality.”

Analysts from Baird Equity Research wrote in a report Wednesday that Rivian is “poised to emerge as a giant EV company,” adding that the company “is blessed with talent, a clean sheet, a solid budget and a solid partner at Amazon.”

Beryl Toktay, director of the Ray C. Anderson Center for Sustainable Business at Georgia Tech, said Rivian’s week in the stock market was “not a cause for long-term concern.”

“These goals by companies are bold. They need to be matched by a set of strategies,” she said. “So a little glimpse, like this company, isn’t really a story in my opinion.”

Don McKenzie, head of the University of Washington’s Sustainable Transportation Laboratory, said it’s too early to speculate on a timeline that still spans nearly 10 years. But if he does, he’ll say Rivian’s trajectory won’t change his outlook on Amazon in general.

“From what I know about Amazon’s goals for electric vehicles, they are planning and initiating purchases from a number of different sellers,” he said. “They didn’t put all their eggs in the Rivian basket.”

Amazon has put 15 different models of electric vehicles on the road, according to an April blog post from the company, including delivery vehicles, e-bikes and e-rickshaws. In addition to its partnership with Rivian, it is working with auto manufacturers Stellantis and Mahindra to create a global delivery fleet, Scarpa said.

“There is no one-size-fits-all approach,” she added.

Amazon placed an order for 100,000 Rivian electric delivery trucks in September 2019. They began testing those trucks in Los Angeles in February 2021.

Since it began its testing program with the Rivian, the “pre-production” cars have delivered 90,000 packages and have driven 50,000 miles.

Of the 25,000 vehicles expected to come from the Rivian this year, Scaringe estimates that about a third — or about 8,300 — will be electric delivery trucks. Rivian has launched a 700-cubic-foot pickup truck and is testing a 500-cubic-foot model.

After months of collecting feedback from Amazon drivers that led to “a whole bunch of improvements,” Scaringe said deliveries “will start to increase, and you’ll start seeing more of them, hopefully reaching all of our neighborhoods delivering packages.”

In the first quarter of this year, Rivian produced 2,553 vehicles and delivered 1,227, according to CFO Claire McDonough. It is preparing to switch to a two-shift operation at its warehouse in Illinois and is on track to launch a new model of the vehicle – the R2 – at its Georgia plant in 2025.

Reassuring investors that Rivian is ready to ramp up production, Scaringe said Wednesday that Rivian has already weathered the worst of the shortages.

“We’ve worked closely with the suppliers…to make sure that the restrictions and situations we’ve been dealing with over the past several weeks, we’ll put them behind us,” he said. “We couldn’t be more confident in the road ahead. …

“We are in the driving seat in terms of our future growth.”

Rivian reported a profit of $95 million for the first three months of 2022. It posted a net loss of $1.6 billion, compared to a loss of $414 million for the same time period the previous year.

It spent $547 million on research and development, up from $289 million in the previous year, attributing most of the losses to shipping expenses, supply chain challenges, significant labor and overhead costs.