Rivian pauses output of Amazon’s EV delivery van on parts shortage

The temporary stoppage began earlier this month at its factory in Normal, Ill., Rivian said. The EV maker declined to specify which components were in short supply.

August 16, 2024 06:33 AM

Bloomberg

BLOOMBERG

Rivian’s vans account for a fraction of the overall fleet used to deliver packages for Amazon.

Rivian Automotive Inc. has paused production of the electric commercial van it makes for Amazon.com Inc. due to a parts shortage in the latest supply chain snafu for the EV maker.

The temporary stoppage began earlier this month at its factory in Normal, Ill., Rivian said. The EV maker declined to specify which components were in short supply, but said it expects to recover all missed production. It provided no timeline.

Part shortages are common in the industry, a Rivian spokesperson told Bloomberg, adding that production of R1 electric pickup and SUV models is unaffected. All affected employees have the opportunity to continue working 40 hours a week during the pause.

The interruption marks another production hiccup for the EV maker as it works toward boosting output of its EV lineup next year. Irvine, California-based Rivian currently makes battery-electric SUVs and pickups at its Illinois factory, along with the delivery van that it supplies primarily to Amazon, its biggest shareholder.

Rivian has amassed a surplus of the delivery vans at the plant that are awaiting delivery to Amazon. The carmaker has a deal to supply the company with 100,000 vans by the end of the decade, and about 15,000 are already in service in the US.

“We’re aware that Rivian encountered short-term production issues this month, and we don’t expect it to impact us,” an Amazon spokesperson said in an emailed statement.

Rivian’s vans account for a fraction of the overall fleet used to deliver packages for Amazon, which taps gig workers who drive their own vehicles, as well as traditional couriers such as UPS Corp.

Rivian CFO Claire McDonough has said the carmaker expects Amazon to take fewer deliveries during the fourth quarter, consistent with the online merchant’s seasonal pattern when it focuses on the holiday sales rush.

Earlier this month, Rivian reaffirmed its target to produce 57,000 electric vehicles this year across its consumer and commercial vehicles, in line with 2023 levels.