Rivian’s Amazon van production under threat

Struggling US EV startup Rivian has warned that its Amazon delivery van production will come to a halt should its seat supplier stop deliveries to the company.

Rivian has taken legal action against the seat supplier Commercial Vehicle Group Inc for violating the supply contract for seats. In the legal documents filed, the seat supplier has nearly doubled the price per unit.

Should the supply of seats stop, Rivian will not be able to fulfil more of the 100,000 vans ordered by its major investor Amazon. An emergency petition for a court order to make Commercial Vehicle Group Inc continue supplying the seats at the original price was granted until the dispute is resolved in court.

In a recent shareholder letter, Rivian admitted it is having supply chain challenges. “We are now ramping production and deliveries of our R1T, R1S, and EDV 700, and while there have been challenges in ramping these vehicles with the current supply chain backdrop, we couldn’t be more energised about the impact we can deliver,” stated Rivian in its Q1 2022 Shareholder Letter. 

The news comes soon after Ford announced it would be selling off a large number of its shares in Rivian thanks in part due to the firm saying that profitability is nowhere in sight for the moment. Such news cannot be good for suppliers who may well be worried they will not be paid should the EV maker go under. This may well have been behind the price hike for the seats.

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