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Why Rivian Automotive Shares Are Trading Lower Today

  • Amazon.Com, Inc (NASDAQ: AMZN) and Rivian Automotive, Inc (NASDAQ: RIVN) are in discussions to eliminate the exclusivity part of their electric-van deal.

  • Rivian could start selling to others after Amazon's order for 2023, the Wall Street Journal reports.

  • Rivian needs to sell all of the vans it makes to Amazon under a 2019 deal.

  • Recently, Amazon ordered about 10,000 vans this year, at the low end of the range it previously provided the automaker. In response, Rivian sought to terminate the exclusivity terms.

  • According to FactSet, Amazon is Rivian's largest shareholder, with a 17% stake in the company, and Amazon is on Rivian's board.

  • Amazon has initiated cost-saving measures over the past year as pandemic recovery and macroeconomic uncertainties hit its business. Amazon shared plans of pausing construction on its second headquarters in the D.C. area and laying off more than 18,000 workers.

  • For Rivian, the exclusivity deal has provided steady demand for one of the three vehicles the automaker builds at its Normal, Ill., factory.

  • The end of exclusivity would mark the latest challenge for Rivian, which is under pressure to cut costs and boost factory output.

  • Price Action: RIVN shares traded lower by 1.02% at $14.02 on the last check Monday.

  • Photo via Wikimedia Commons

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This article Why Rivian Automotive Shares Are Trading Lower Today originally appeared on Benzinga.com

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