EV Parts Shortage Forces Manufacturer to Suspend Production
Electric vehicle (EV) manufacturer Rivian has suspended production of Amazon.com delivery vans. According to Yahoo Finance, the Rivian production halt has been triggered by a shortage of EV parts.
Shares of the California-based EV company dropped by 4% following the Rivian vans production halt announcement. The drop reflects investor concerns due to the current supply chain disruption.
Missed Production
Rivian paused production of Amazon delivery vans early this month. The company manufactures the vans from its plant in Normal, Illinois.
The company expects to recover production losses despite the Rivian EV parts shortage. However, it did not provide specific timelines within which this will be achieved.
“A part shortage has temporarily impacted our Electric Delivery Van (EDV) production. We expect to recover all missed production,” a Rivian spokesperson said in a statement.
Only production of Amazon delivery vans has been affected by the part shortage. Rivian continues to produce other EV vehicles, including the R1T pickup and R1S SUV.
Amazon had placed an order for 100,000 electric vans. The order is to be delivered by the year 2030. 15,000 Amazon EV delivery vans are already in service. Amazon is aware of Rivian’s production halt and does not expect it to affect its order.
Supply Challenges
The recent production halt isn’t the only supply chain challenge that Rivian is facing. Like other electric vehicle manufacturers, the company has been grappling with a range of issues for the last two years as a result of supplier shortages. In April this year, the EV maker closed temporarily for retooling.
Rivian hasn’t disclosed information on the specific parts it’s missing and the supplier in question. However, the current production halt highlights the wider challenges facing the EV industry. These challenges cause manufacturers to grapple with semiconductor shortages and other supply chain problems.
Large Investor
Amazon is Rivian’s largest investor. The e-commerce giant holds a 16% stake in the EV company. Amazon-related sales constituted 19% of Rivian’s total revenue in 2023. Early this year, Rivian sustained its production targets. It however said its current quarter deliveries would be lower due to the temporary shutdown it had in April.
