Rivian Automobiles (NASDAQ: RIVN) Shares fell on Friday afternoon after the company made a surprise announcement. While the focus on the electric vehicle (EV) maker recently has been largely on the unveiling of its next-generation SUV, today’s news revolved around its commercial delivery vans.
Shares fell as much as 5.5% after news broke that the company had stopped producing vans intended for the e-commerce giant AmazonAlthough the stock has recovered some of that decline, it was still down 4.3% as of 2:30 p.m. ET.
Rivian orders huge electric cars
Amazon has placed a standing order for 100,000 electric delivery vans from Rivian to be delivered by the end of the decade. Late last year, Amazon said its delivery fleet already includes 10,000 Rivian vans. And Amazon isn’t just a Rivian customer. As an early investor, Amazon holds nearly 160 million shares, representing a more than 16% stake in Rivian as of April 29.
But today, Rivian announced that a parts shortage forced it to temporarily halt production of Amazon’s electric delivery vans. The company did not disclose which specific part or supplier was affected by the production disruption. A Rivian spokesperson released an emailed statement saying, “A parts shortage has temporarily impacted our electric delivery van (EDV) production. We expect to be able to recover all lost production.”
Sales to Amazon accounted for about 19% of Rivian’s revenue in 2023. However, Rivian said production of its consumer pickup truck and SUV was unaffected by the parts shortage. Ultimately, this news is a non-issue for investors. For those considering buying shares, this could actually be an opportunity to score a slightly discounted share price.
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John Mackey, former CEO of Whole Foods Market, a subsidiary of Amazon, is a member of The Motley Fool’s board of directors. Howard Smith holds positions in Amazon and Rivian Automotive. The Motley Fool holds positions in Amazon and recommends the company. The Motley Fool has a disclosure policy.
Why Rivian Stock Fell on Friday and Why Investors Shouldn’t Panic was originally published by The Motley Fool
