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.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Adviser
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.
SOSS22010702