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Rivian Responds to Amazon’s Stellantis Deal
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Rivian Responds to Amazon’s Stellantis Deal

Rivian Automotive (RIVN) stock fell sharply on Wednesday after Amazon (AMZN) inked a deal to purchase electric delivery vans from its rival Stellantis (STLA). The stock declined more than 11% on Wednesday and was down another 9.5% in early trading on Thursday.

Rivian makes electric vehicles and is one of the many companies competing with Tesla (TSLA). In 2019, Amazon signed Rivian to supply it with 100,000 electric delivery vans. The company expects to deliver all the vehicles Amazon has ordered by 2025. The number of vans Amazon has ordered from Stellantis is not currently known.

Although some investors saw Amazon’s Stellantis deal as a blow to Rivian, the company has come out to explain that its business with Amazon is safe. Rivian said that considering Amazon’s global scale, it expects it to buy electric vehicles from many suppliers, according to Bloomberg. Rivian added that its deal with Amazon not only remains intact but continues to thrive and grow.

Amazon has also come out to clarify that its deal with Stellantis has not affected its partnership with Rivian. In addition to being a customer, Amazon is also an investor in Rivian, alongside Ford (F).

Rivian has built a pickup truck branded R1T and a sport utility vehicle branded R1S. It has begun delivering the vehicles to customers. As of December 15, the company had received 71,000 preorders for the vehicles from customers in the U.S. and Canada.

Rivian has a manufacturing plant in Illinois and plans to set up another production base in Georgia as it seeks to rapidly expand its capacity. The company aims to produce as many as 200,000 vehicles at the Illinois factory and 400,000 vehicles at the Georgia site.

Analysts’ Take

Mizuho Securities analyst Vijay Rakesh recently reiterated a Buy rating on Rivian stock with a price target of $145, which suggests 77.17% upside potential.

Consensus among analysts is a Moderate Buy based on 10 Buys and 4 Holds. The average Rivian Automotive price target of $134.64 implies 68.93% upside potential to current levels.

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