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Rivien (NASDAQ: RIVN) garnered a lot of attention after its multibillion-dollar initial public offering (IPO) last year. Many investors have seen Rivian’s partnership with Amazon (NASDAQ: AMZN), under which it will deliver 100,000 electric delivery vans to the latter, as a key pillar in Rivian’s growth story. So how does Amazon handle Stellantis (NYSE: STLA) affect Rivian? And should you buy Rivian shares in 2022? Let’s discuss it next.

The Amazon partnership

Amazon is looking to reduce emissions from its last mile delivery operations by switching to electric delivery vehicles. The e-commerce giant obviously doesn’t want to rely on a single electric vehicle (EV) manufacturer for the same thing. Stellantis has been supplying light commercial vehicles for Amazon’s last mile operations since 2018. While Amazon has partnered with Rivian for the delivery of electric vans, it makes sense that it is also purchasing electric vehicles from its existing supplier. Stellantis, which is launching the version of its Ram ProMaster in 2023.

Should you invest in Rivian in 2022?

Image source: Rivian.

Stellantis designed the electric Ram ProMaster with Amazon’s needs in mind. The size of the order has not been decided or disclosed, as the companies say they would “put thousands of BEV ProMasters on the road every year.”

Indeed, increased competition is bad news for Rivian. But the truth is, Amazon’s partnership with Stellantis hasn’t increases competetion. He just reminded investors of the competition that already existed. Investors were buying Rivian shares as if they would face no competition. Amazon’s partnership with Stellantis has reminded us that Rivian doesn’t operate in a vacuum.

All is not lost for Rivian

Again, just as Rivian isn’t the only one offering electric pickup trucks, SUVs, or delivery vans, Amazon isn’t Rivian’s only customer. Rivian offers consumer and utility vehicles. In the commercial vehicle segment, Amazon appears to be Rivian’s only customer so far; at least the company hasn’t announced another name yet. However, this does not always have to be the case. It can still deliver vehicles to other commercial customers.

Additionally, Amazon’s partnership with Stellantis might not have much of an impact on Rivian. Amazon said the partnership does not affect its relationship with Rivian. There doesn’t appear to be a major reason for Rivian investors to panic over the partnership with Stellantis.

Finally, Rivian has over 71,000 pre-orders for its R1 pickup trucks and SUVs. The company could see its orders increase if it gets a positive response from its initial customers and manages to deliver vehicles according to its plans. Rivian’s R1T pickup truck has already won the MotorTrend’s Truck of the year award 2022.

Is the action of the electric vehicle manufacturer a purchase?

Rivian stock has fallen nearly 50% from its all-time high of over $ 172 which it hit in November. The stock has fallen nearly 17% so far in 2022. Despite the drop, Rivian stock has a market cap of over $ 77 billion. That seems a bit too high for a company that faces significant risk and has only delivered a few hundred vehicles so far.

Just like in the commercial segment, Rivian also faces competition in the pickup truck and SUV market. Ford secures record bookings for its upcoming F-150 Lightning pickup. Several other manufacturers of automobiles and electric vehicles, including You’re here and General Motors, plan to launch their electric pickup trucks soon. Thus, Rivian could also face very fierce competition in this market.

Although Rivian delivered the first electric pickup trucks of all time, the business still faces significant risks. So, you can either wait for a more attractive entry point or wait for the growth of the company to evolve enough to justify the valuation of the stock. That doesn’t appear to be the case at the moment, but that could change as 2022 progresses.

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