Amazon records a $3.9 billion loss of Rivian ownership in the second quarter

Rivian CEO RJ Scaringe and Amazon CEO Andy Jassy ride around in one of the company’s electric delivery trucks.

Amazon

Amazon’s stake in electric car maker Rivian Automotive has reached $27 billion. That was in November, shortly after Rivian’s IPO, which happened before its peak on the Nasdaq.

But with investors abandoning risk in 2022 and selling high-priced IPOs last year, Amazon has now incurred paper losses in its stake in Rivian totaling $11.5 billion for the first two quarters, a period during which Rivian lost three-quarters of its value.

Amazon said in its second-quarter earnings report Thursday that it posted a loss of $3.9 billion on its Rivian holdings during the period. The report comes a day after Ford, also one of Rivian’s biggest backers, cut its market value by $2.4 billion.

Amazon’s investment is now worth about $5 billion.

The price cuts don’t affect Amazon’s operations or cash position, and only reflect the massive fluctuations in the market since late last year. The investment could become an issue if the Rivian startup hits a snag or runs out of cash, hampering the company’s ability to manufacture delivery vehicles as quickly as Amazon promised.

Amazon said last week that it had begun rolling out some of the electric delivery trucks it had developed with Rivian. Amazon said it expects to have thousands of Rivian trucks in more than 100 cities by the end of this year, the first step toward its goal of having 100,000 electric delivery vehicles on the road in the United States by 2030.

Rivian, which reports quarterly results on August 11, has struggled to meet production targets for its R1T and R1S electric vehicles, which focus more on the consumer market. The company halved production forecasts for 2022 in March, to just 25,000 vehicles, including Amazon trucks, as it deals with supply chain constraints and issues with its assembly line.

However, optimism rebounded in the third quarter. The stock has risen about 29 percent since the end of June. He got an extra boost on Wednesday after Senate Majority Leader Chuck Schumer and Senator Joe Manchin of the DWV said they had reached agreement on what could be the most ambitious climate spending package in US history.

The Inflation Reduction Act of 2022 includes $369 billion in clean energy allocations. Rivian stock is up about 3%, joining a broader rally in solar and alternative energy stocks.

Watch: First look at Amazon and Rivian electric delivery trucks

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