Investor's Corner
Amazon leans on Rivian to deliver packages in 100 U.S. cities for the Holidays
Since Amazon and Rivian announced a partnership for sustainable e-commerce and 100,000 all-electric delivery vans in 2019, the conglomeration has flourished into a successful and groundbreaking package delivery program. The 2022 Holiday season will be Rivian and Amazon’s first delivering packages in the EVs, and the e-commerce giant is depending on the sustainable transportation startup to deliver gifts in 100 U.S. cities this year.
Amazon has already delivered more than 5 million packages in Rivian’s EDV, the acronym for ‘Electric Delivery Van.’ After launching a pilot program this past Summer in a dozen cities, including Baltimore, Chicago, Dallas, Kansas City, Nashville, Phoenix, San Diego, Seattle, and St. Louis, Rivian and Amazon have expanded their fleet of EDVs to over 1,000 units present in more than 100 cities across the United States.
With the 2022 Holiday season approaching, the two companies are now tasked with their biggest challenge by expanding into more cities and delivering more packages than ever. When the holidays roll around, Rivian will deliver Amazon packages in even more cities. Amazon said it will drop off packages in Austin, Boston, Denver, Houston, Indianapolis, Las Vegas, Madison, Newark, New York, Oakland, Pittsburgh, Portland, Provo, and Salt Lake City this year, a small step toward its 100,000 EDV goal by 2030.
Major U.S. cities and regions receiving deliveries with Amazon’s custom electric delivery vehicles. (Credit: Rivian)
Amazon’s Vice President of Transportation Udit Madan commented on the expansion, and while the partnership has come a long way, there is still plenty to accomplish in the next seven years:
“We’re always excited for the holiday season, but making deliveries to customers across the country with our new zero-emission vehicles for the first time makes this year unique. We’ve already delivered over 5 million packages with our vehicles produced by Rivian, and this is still just the beginning—that figure will grow exponentially as we continue to make progress toward our 100,000-vehicle goal.”
Amazon has quickly become a dominating force in the e-commerce world, and its sheer size alone as a business makes it an ideal candidate for testing EV-based package deliveries. The company has a goal to be net-zero carbon by 2040, ten years after it plans to have 100,000 Rivian EDVs bearing its name on the side. It is a necessary step in the company’s mission to be sustainable, and it might not be possible without Rivian.
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“Fleet electrification is essential to reaching the world’s zero-emissions goal,” Rivian’s Chief Growth Officer Jiten Behl said. “So, to see our ramp up in production supporting Amazon’s rollout in cities across the country is amazing. Not just for the environment but also for our teams working hard to get tens of thousands of electric delivery vehicles on the road. They continue to be motivated by our combined mission and the great feedback about the vehicle’s performance and quality.”
While it is important to have a vehicle Amazon feels can lead the charge in the transition to sustainable package delivery, it is also important to keep drivers happy and comfortable in their vehicles. So far, Amazon drivers have expressed positive feedback regarding the Amazon EDV, complementing the vehicle’s tech and safety features.
“We started making deliveries with the electric vehicles from Rivian in August, and my team has had nothing but good things to say about the vans,” Julieta Dennis, owner of Kangaroo Logistics, an Amazon Delivery Service Partner, said. “The safety features, like the automatic emergency braking and 360-degree cameras, are game changers, and the drivers also love the overall comfort of the vehicle.”
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Elon Musk
Tesla locks in Elon Musk’s top problem solver as it enters its most ambitious era
The generous equity award was disclosed by the electric vehicle maker in a recent regulatory filing.
Tesla has granted Senior Vice President of Automotive Tom Zhu more than 520,000 stock options, tying a significant portion of his compensation to the company’s long-term performance.
The generous equity award was disclosed by the electric vehicle maker in a recent regulatory filing.
Tesla secures top talent
According to a Form 4 filing with the U.S. Securities and Exchange Commission, Tom Zhu received 520,021 stock options with an exercise price of $435.80 per share. Since the award will not fully vest until March 5, 2031, Zhu must remain at Tesla for more than five years to realize the award’s full benefit.
Considering that Tesla shares are currently trading at around the $445 to $450 per share level, Zhu will really only see gains in his equity award if Tesla’s stock price sees a notable rise over the years, as noted in a Sina Finance report.
Still, even at today’s prices, Zhu’s stock award is already worth over $230 million. If Tesla reaches the market cap targets set forth in Elon Musk’s 2025 CEO Performance Award, Zhu would become a billionaire from this equity award alone.
Tesla’s problem solver
Zhu joined Tesla in April 2014 and initially led the company’s Supercharger rollout in China. Later that year, he assumed the leadership of Tesla’s China business, where he played a central role in Tesla’s localization efforts, including expanding retail and service networks, and later, overseeing the development of Gigafactory Shanghai.
Zhu’s efforts helped transform China into one of Tesla’s most important markets and production hubs. In 2023, Tesla promoted Zhu to Senior Vice President of Automotive, placing him among the company’s core global executives and expanding his influence beyond China. He has since garnered a reputation as the company’s problem solver, being tapped by Elon Musk to help ramp Giga Texas’s vehicle production.
With this in mind, Tesla’s recent filing seems to suggest that the company is locking in its top talent as it enters its newest, most ambitious era to date. As could be seen in the targets of Elon Musk’s 2025 pay package, Tesla is now aiming to be the world’s largest company by market cap, and it is aiming to achieve production levels that are unheard of. Zhu’s talents would definitely be of use in this stage of the company’s growth.
Tesla analyst Andrew Percoco of Morgan Stanley teased the company’s dominance in its self-driving initiative, stating that its lead over competitors is “not even close.”
Percoco recently overtook coverage of Tesla stock from Adam Jonas, who had covered the company at Morgan Stanley for years. Percoco is handling Tesla now that Jonas is covering embodied AI stocks and no longer automotive.
His first move after grabbing coverage was to adjust the price target from $410 to $425, as well as the rating from ‘Overweight’ to ‘Equal Weight.’
Percoco’s new note regarding Tesla highlights the company’s extensive lead in self-driving and autonomy projects, something that it has plenty of competition in, but has established its prowess over the past few years.
He writes:
“It’s not even close. Tesla continues to lead in autonomous driving, even as Nvidia rolls out new technology aimed at helping other automakers build driverless systems.”
Percoco’s main point regarding Tesla’s advantage is the company’s ability to collect large amounts of training data through its massive fleet, as millions of cars are driving throughout the world and gathering millions of miles of vehicle behavior on the road.
This is the main point that Percoco makes regarding Tesla’s lead in the entire autonomy sector: data is King, and Tesla has the most of it.
One big story that has hit the news over the past week is that of NVIDIA and its own self-driving suite, called Alpamayo. NVIDIA launched this open-source AI program last week, but it differs from Tesla’s in a significant fashion, especially from a hardware perspective, as it plans to use a combination of LiDAR, Radar, and Vision (Cameras) to operate.
Percoco said that NVIDIA’s announcement does not impact Morgan Stanley’s long-term opinions on Tesla and its strength or prowess in self-driving.
NVIDIA CEO Jensen Huang commends Tesla’s Elon Musk for early belief
And, for what it’s worth, NVIDIA CEO Jensen Huang even said some remarkable things about Tesla following the launch of Alpamayo:
“I think the Tesla stack is the most advanced autonomous vehicle stack in the world. I’m fairly certain they were already using end-to-end AI. Whether their AI did reasoning or not is somewhat secondary to that first part.”
Percoco reiterated both the $425 price target and the ‘Equal Weight’ rating on Tesla shares.
Tesla stock (NASDAQ: TSLA) just got a price target boost from its biggest bear, Gordon Johnson of GLJ Research, who raised his expected trading level to one that is 95 percent lower than its current trading level.
Johnson pushed his Tesla price target from $19.05 to $25.28 on Wednesday, while maintaining the ‘Sell’ rating that has been present on the stock for a long time. GLJ has largely been recognized as the biggest skeptic of Elon Musk’s company, being particularly critical of the automotive side of things.
Tesla has routinely been called out by Johnson for negative delivery growth, what he calls “weakening demand,” and price cuts that have occurred in past years, all pointing to them as desperate measures to sell its cars.
Johnson has also said that Tesla is extremely overvalued and is too reliant on regulatory credits for profitability. Other analysts on the bullish side recognize Tesla as a company that is bigger than just its automotive side.
Many believe it is a leader in autonomous driving, like Dan Ives of Wedbush, who believes Tesla will have a widely successful 2026, especially if it can come through on its targets and schedules for Robotaxi and Cybercab.
Justifying the price target this week, Johnson said that the revised valuation is based on “reality rather than narrative.” Tesla has been noted by other analysts and financial experts as a stock that trades on narrative, something Johnson obviously disagrees with.
Dan Nathan, a notorious skeptic of the stock, turned bullish late last year, recognizing the company’s shares trade on “technicals and sentiment.” He said, “From a trading perspective, it looks very interesting.”
Tesla bear turns bullish for two reasons as stock continues boost
Johnson has remained very consistent with this sentiment regarding Tesla and his beliefs regarding its true valuation, and has never shied away from putting his true thoughts out there.
Tesla shares closed at $431.40 today, about 95 percent above where Johnson’s new price target lies.
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