Amazon is ready to hit the road to Chicago and the US with the first of its custom Rivian electric delivery vans, and a lot could depend on it for both companies.
Rivian CEO and Founder R.J. Scaringe and Amazon executives gathered on Thursday afternoon to unveil the electric vans at the Amazon Delivery Station on South Woodlawn Avenue in the Pullman neighborhood of South Chicago, where packages will be loaded for delivery to doorstep. .
“We are going to put a lot more of these vehicles on the road,” said Scaringe, sitting in the driver’s seat of a ready-to-go electric EDV 700 van. “And we will start to see, hopefully in every area in every city in the US, they will deliver your packages. “.
However, the delivery of electric vans is behind schedule.
Amazon, one of Rivian’s early investors, has ordered 100,000 electric vans from the fledgling electric vehicle maker, which has struggled with a slower-than-expected ramp-up since starting production in September at a converted Mitsubishi plant in Normal state. In addition to commercial vans, Rivian has over 90,000 consumer orders for the R1T pickup truck and R1S SUV.
When the Amazon deal was announced in 2019, the e-commerce giant expected to have its first Rivian electric delivery vans on the roads by 2021, with 10,000 parcels delivered by the end of this year. Amazon still plans to have all 100,000 EDVs in service by 2030.
Electric delivery vans will be launched in more than a dozen cities, including Chicago, Baltimore, Dallas, Kansas City, Nashville, Phoenix and St. Louis, with “thousands” of vehicles arriving in more than 100 cities by the end of the year. , Amazon said on Thursday.
The vans come in two models, the EDV 700 and the smaller EDV 500, and are integral to Amazon’s climate commitment to achieving zero carbon emissions by 2040. By 2030, Amazon is projected to cut its carbon emissions by 4 million metric tons per year. when a full fleet of 100,000 electric vans is on the way.
Udit Madan, Amazon’s vice president of last mile delivery, said the company is pleased with the progress of the ambitious electric van.
“When we started in 2019, we started with a sketch,” Madan said on Thursday. “We didn’t know there was going to be a pandemic, we didn’t have supply chain problems. And so, given all of that, I think it’s been a wonderful job to make progress at such a speed, and at a speed that’s usually unheard of in the automotive industry.”
Features include a large windshield, 360-degree exterior cameras, hands-free navigation, and an automatic bulkhead door that opens and closes the cargo area when the driver stops and starts the van. Amazon has been testing delivery of prototype vehicles since last year, delivering more than 430,000 packages and driving more than 90,000 miles, the company said.
While Madan touted the arrival of the first electric delivery vans as a “really significant milestone,” the company has much more at stake for Rivian’s success than fulfilling an order for 100,000 vehicles. The online trading giant owns more than 162 million shares of Rivian, or 18% of the company, according to documents filed with the Securities and Exchange Commission.
Rivian, which expects to build 25,000 commercial and consumer electric vehicles this year, still has a long way to go to fulfill Amazon’s order.
The Normal plant has an annual production capacity of 150,000 vehicles and was scheduled to build 50,000 vehicles in 2022 before global supply chain issues, including ongoing semiconductor shortages, cut the first year plan in half. Earlier this month, Rivian announced that it produced 4,401 vehicles in the second quarter, up from 2,553 built in the first quarter.
Amazon’s electric vans accounted for about a third of nearly 8,000 electric vehicles produced in the second quarter, the company said.
When Rivian went public in November, investors bet that the electric vehicle startup would be the Tesla of trucks, pushing its valuation north of $100 billion. But the stock, which peaked at $179.47 in mid-November, has fallen sharply this year amid slow gains, closing Thursday at $34.13 a share and cutting Rivian’s market capitalization to around $30 billion.
California-based Rivian, which has about 6,000 more employees and a total of 14,000 employees at its Normal plant, is “suspending certain non-manufacturing hires” and cutting costs while reconfiguring the organization to support “sustainable growth,” Scaringe told employees in a memo. for all employees. sent earlier this month.
“The most challenging part of this process has been to evaluate, through our organization, the size and structure of our teams and how well that fits into our strategic plan,” Scaringe said in a memo. “Our team is the core of Rivian and we try to be as thoughtful as possible when considering any cuts.”
According to Scaringe’s memo, Normal has no plans to cut its manufacturing workforce, and ramping up R1 and Amazon EDV was listed as a first priority for the company.
Delivery stations are the last mile in the Amazon delivery process, where packages from fulfillment centers are sorted and loaded into delivery vans for delivery to customers. Amazon has 20 fulfillment centers and 20 delivery stations in Illinois. Charging stations are currently being installed to support the deployment of electric vans, the company said.
In December, dozens of employees at two Amazon delivery stations in the Chicago area went on strike demanding higher wages and better working conditions, disrupting work just days before Christmas.
At least one Amazon driver on Thursday appeared to be thrilled with the new electric delivery vans, dozens of which were plugged into charging stations in the parking lot, baking in the sun as temperatures reached 90 degrees by noon.
In addition to features such as high-tech video screens with pre-programmed route maps and delivery routes, Darin Watkins, who works at the South Woodlawn Avenue delivery station, was grateful for the reliable air conditioning and temperature-controlled driver’s seat that come standard on the new EDV.
“I love driving these vans,” said Watkins, 29, from Chicago. “The seats are so comfortable. And on top of that, they give us heated and air-conditioned seats. You can’t beat this.”
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