The share price for electric truck company Rivian has fallen below the price of its initial public offering after Amazon said it would also buy electric delivery vans from Chrysler owner Stellantis.
Amazon is Rivian’s second-largest shareholder, and an agreement to buy 100,000 electric pickups from the start formed one of the cornerstones of the company’s appeal during its rising IPO in November.
But on Wednesday, Stellantis announced an agreement to sell its own electric Ram ProMaster pickups from 2023 to the online shopping company.
Competition among automakers is heating up in electric commercial vehicles: General Motors unveiled its battery-powered Chevrolet Silverado on Wednesday, a $ 40,000 work truck designed to challenge Ford’s F-150 Lightning electric pickup truck. Ford said on Tuesday it would increase production of the Lightning to satisfy strong consumer demand.
Carlos Tavares, Stellantis’ CEO, described estimates that the deal with Amazon would lead to “tens of thousands” of bus sales as “extremely conservative” – raising the prospect of the order competing with the size of Rivian’s deal with Amazon.
The vehicles will “have specific features that will be focused on improving last-mile delivery performance,” Tavares told the Financial Times.
Rivian’s share fell as much as 16 percent to $ 75.13 on Thursday, below its IPO price of $ 78 per share. Shares partially recovered to $ 84.89 in New York by noon, down 5.7 percent.
The California-based company rose as high as $ 179.47 within days of its listing on Nov. 10, with an avalanche of options-related options trading. At one point, the loss-making group had a market valuation higher than Volkswagen, Ford and General Motors.
Rivian said Amazon’s deal with Stellantis was “good news for the industry” because it promotes efforts to reduce carbon emissions by electrifying large fleets.
“Amazon’s scale is unprecedented worldwide, and we expect them to buy vehicles from many vendors,” the company said. “Our own partnership with them is intact, thriving and growing.”
Amazon said in 2019 it plans to buy 100,000 electric delivery vans from Rivian, an agreement that marked the beginning as a serious competitor to more established electric vehicle manufacturers such as Tesla or traditional car manufacturers. The e-commerce company did not immediately respond to a request for comment.
Rivian is a member of the technology-heavy Nasdaq Composite Index. Last year’s rally in loss-making technology stocks faltered, with accelerate accelerate along with a sale in the $ 22tn US Treasury bond market, the backbone of the global financial system.
As government debt yields rose, the attractiveness of many loss-making companies faded as their valuations relied in part on easy monetary policy and low interest rates. A Goldman Sachs index of useless technology companies now being followed has fallen nearly 10 percent this year.