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Amazon charges a fee at the startup of automaker Rivian




Amazon has ordered 100,000 fully electric vans from the US startup Rivian, suggesting that the retail giant intends to own more of the logistics network that delivers more than 5 billion deliveries a year. The move is a huge blessing to Rivian, a young Tesla-like carmaker who has no plans to make his first production car until late next year.

At its headquarters in Michigan, Rivian is tailored to design the van's exterior, interior, suspension and software for Amazon, said a car manufacturer spokesman. Amazon will distribute the vans globally, in left and right hand layout. Rivian will build them at the factory in Normal, Illinois; it aims to deliver the first Amazon vans by 2021[ads1], and to deliver 10,000 by the end of 2022. In a press release, Amazon said it expects to have full fleet on the road by 2030. The carmaker will also service the vans (though electric vehicles require less maintenance than their gas and diesel-powered counterparts), and will not offer the vehicles to other buyers.

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It is not surprising to see Rivian get into the van. The start-up was founded in 2009 with a focus on hybrids, and in 2011 it turned its attention to fully electric vehicles. Instead of developing an entire platform for each new model – and introducing one vehicle type at a time, the way Tesla went from Roadster to Model S to Model X to Model 3 – Rivian has developed a "skateboard" design, on which all vehicles are based on. It includes a 180 kWh battery pack, almost twice the size of Tesla's largest offering, and according to Rivian good for the 450 mile range, even in a heavy, not-so-aerodynamic vehicle.

Amazon's vans will use the same battery, powertrain, and electrical network that the two consumer vehicles Rivian plans to begin building next year, $ 69,000 R1T pickup and $ 72,500 R1S SUV. Picking out the body of a van on a platform designed for the large vehicles should be easy enough. And while it is not, it will probably be worth the effort to lock in such a high-profile order from a high-profile customer, as Rivian is seeking a foothold in an industry known for killing newcomers.

Even for Amazon, this is a big deal. The company recently ordered 20,000 vans from Daimler and around 2,000 vans from Michigan-based Spartan. Once Rivian has added 100,000 to that pile, Amazon's van will equate to the 130,000 vehicles in UPS's global fleet.

While Rivian is a small player, it is a logical partner for Amazon, which led a $ 700 million investment round in Rivian earlier this year and probably got a nice deal on its big order. Going electric can help stave off Amazon workers who are upset about the employer's role in the climate crisis and should save the company on fuel costs – charging even a large battery pack usually costs just a few dollars. Amazon CEO Jeff Bezos revealed the order during an appearance Thursday morning focusing on climate change issues.

What is not clear is how these vans will fit into Amazon's logistics network. The recent effort to take control of the delivery business has produced a hodgepodge of "Delivery Service Partners" (including former employees paid $ 10,000 to quit and start their own businesses), "Flex" drivers and deals with delivery companies like UPS. Amazon could provide Rivian vans to individual drivers (as it already does with some vehicles), but it needs to make sure these drivers can charge the batteries every night. EVs work especially well in fleet operations, where they can return to the same place every night (or anytime) to connect. An Amazon spokeswoman declined to answer questions about how much it will pay per vehicle and how it will incorporate the vans into its network.



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