Future Fund Managing Partner Gary Black is optimistic about California-based EV maker Rivian Automotive Inc RIVN and expects it to deliver 14,000 units of its delivery vans this year.
What Happened: Early on Thursday, telecommunications company AT&T Inc T announced that it will purchase EVs from Rivian for its fleet as part of a pilot program focused on cutting transport emissions. AT&T said that it expects to add Rivian’s commercial vans as well as R1 vehicles to its fleet starting in 2024.
Black noted that this is the first deal for Rivian after the company announced last month that it had ended its exclusivity agreement with online retailer Amazon.com Inc for its delivery vans.
Amazon placed an order for 100,000 EDVs from Rivian in 2019. As per the initial contract, Rivian could deliver solely to Amazon for four years after initial deliveries. The California-based EV maker started delivering to Amazon in 2022.
Currently, Amazon, who is also a Rivian shareholder, has over 10,000 Rivian-made vans on the road and has delivered over 260 million packages with them.
However, last month, Rivian said that it had amended the terms and conditions of the agreement to allow it to sell its vehicles to other fleet operators as well.
Black’s Take: The end of the exclusivity agreement has opened the door for more customers. For the entire year, Black sees the EV maker delivering 54,000 vehicles including 14,000 delivery vans. This is in line with the company’s production guidance of 54,000 units.
In financial terms, Black expects the EV maker to be gross margin positive by the last quarter of 2024 and EBITDA positive by 2026.
As per the analyst, Rivian is one of the only three investable EV companies together with giants such as Tesla Inc TSLA and BYD Co Ltd BYDDF BYDDY. The company is capable of making EVs profitably in the future, Black said.
Photo by Tada Images on Shutterstock
Rivian Price Action: Rivian shares closed 14% higher at $22.43 on Thursday.
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