Amazon Expanding EV Fleet, Stellantis the Beneficiary This Time

Not Just a Purchase Agreement: Amazon and Stellantis Partnering Up

Amazon (AMZN) is entering into an agreement that will see the tech giant purchase a number of electric vehicles from Stellantis (STLA). It’s not clear how many vehicles will be purchased, but Amazon will become the first commercial buyer of the Ram ProMaster battery EV, which is set to launch in 2023. A statement indicates that post-launch, Amazon will put thousands of the electric vans onto roadways each year.

The deal falls in line with Amazon’s expanded fleet of electric delivery vehicles, but their agreement with Stellantis goes deeper. Amazon Web Services and other technology will be utilized within new smart cockpit software that Stellantis will develop. The soon-to-arrive Ram ProMaster was also built with input from Amazon, further illustrating the robust partnership.

Part of a Growing Trend Between Tech and Auto

Tech companies are increasingly joining forces with electric vehicle makers. Ford (F) announced a deal over the past year in which Google (GOOGL) will provide both software for cars and data-hosting services for the company as a whole. Meanwhile, GM (GM) orchestrated a deal whereby Microsoft will invest in Cruise, a self-driving car company in which GM is heavily invested.

This latest collaboration between Amazon and Stellantis will offer expanded services such as an interactive course designed for off-roading in a Jeep, or entertainment options for keeping the kids distracted in the backseat of a Pacifica minivan.

In some cases, traditional automakers are showing interest in pairing up with EV companies, although not all partnerships pan out. For example, two months ago Ford and Rivian (RIVN) canceled plans to work on a jointly developed electric vehicle. Ford invested $500 million into Rivian in April 2019.

Good For Stellantis, Not So Much For Rivian

While reports of the Amazon and Stellantis partnership represented good news for the maker of Ram, Chrysler, and Jeep, it served as a bit of a damper for a newcomer in the space. Shares of Rivian tumbled following the announcement, as it was Amazon’s original EV purchase partner.

Further analysis also shows Rivian may be struggling to ramp up production following the Amazon contract for 100,000 vehicles. In mid-December Rivian said they had a backlog of 71,000 preorders, and that all orders placed going forward won’t arrive until sometime next year. That said, Amazon put out a statement saying they always knew multiple companies would be involved in their EV fleet expansion, adding they remain excited about their relationship with Rivian.

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ABOUT Meg Richardson Meg Richardson is a writer specializing in markets, technology, and personal finance. She loves breaking down seemingly complex ideas and making them readable and interesting for everyone. She holds an MFA in writing from Columbia University. When she is not writing about finance, she enjoys running in Central Park and drawing cartoons.

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