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Why Is Rivian (RIVN) Stock Revving Up Today?

  • Rivian (RIVN) is surging today on news that Amazon (AMZN) will commence deliveries using Rivian vans.
  • This move is taking place today, and expected to roll out across a number of key U.S. markets this year.
  • An order of 100,000 electric vans may take years to produce, but this is a big milestone.
RIVN stock - Why Is Rivian (RIVN) Stock Revving Up Today?

Source: Michael Vi / Shutterstock

Today marks a big milestone for electric vehicle (EV) maker Rivian (NASDAQ:RIVN). Accordingly, shares of RIVN stock are surging higher, as investors price in news that, starting today, Amazon (NASDAQ:AMZN) customers will start seeing Rivian vans deliver their packages.

Now, much ado has been made about Amazon’s impressive order of 100,000 electric delivery vans from Rivian. Indeed, at Rivian’s current production run rate, filling this one order will provide years of demand. However, a marathon starts with the first step. And investors appear to be taking news of these initial deliveries as a big positive.

Rightfully so.

For bulls on Rivian, it’s the forward-looking prospects of this company that are attractive. Accordingly, having Amazon as a key investor and benefactor of the company should bode well for long-term growth. As Amazon’s delivery van fleet ages, more demand over time should bode well for the EV maker. It’s an easy thesis to follow.

Let’s dive more into some of the specifics of today’s move.

RIVN Stock Surges on Reports Vehicles Are Now Delivering Amazon Packages

Amazon has reportedly begun its rollout of Rivian electric vans in key cities today. These cities include Chicago, Seattle, San Diego, Nashville, St. Louise, Dallas, Baltimore, and Kansas City. Other cities are also scheduled to roll out these vehicles during this first phase, with even more to follow. Accordingly, as Amazon ramps up its EV fleet, investors in both Amazon and Rivian have a lot to cheer.

The electrification of last mile delivery is a big win for proponents of greenhouse gas (GHG) reductions. Indeed, one of the knocks on e-commerce has been the heightened carbon footprint assigned to delivering packages. As consumers become more eco-conscious, Amazon has sought a strategy to become more environmentally-friendly. Thus, this move appears to be a big win for all parties involved.

From here, it will be interesting to see how this rollout ultimately plays out from an operational perspective for Amazon. Will the range on these vehicles limit delivery routes? Can charging infrastructure handle the increased demand from these vehicles? Right now, these are unknowns we will certainly learn more about in the coming quarters.

That said, today is clearly a day of celebration for investors. Rivian is going to be a stock to watch for the rest of the year, as more news materializes on this front.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.


Article printed from InvestorPlace Media, https://investorplace.com/2022/07/why-is-rivian-rivn-stock-revving-up-today/.

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