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.
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.