You may soon see one of Rivian Automotive's (RIVN 0.27%) battery-powered delivery vans outside your home. Amazon's (AMZN 0.83%) drivers began using the electric vehicles (EVs) on Thursday to deliver packages to customers across more than a dozen cities in the U.S. It's the start of a nationwide rollout that could see the e-commerce giant operate thousands of Rivian's EVs in over 100 cities by the end of 2022.

The two companies struck a partnership in 2019. Amazon placed an order for 100,000 Rivian delivery vans that are slated for delivery by the end of the decade. Amazon also acquired a roughly 18% stake in Rivian as part of the deal. 

A Rivian delivery van is being made in a manufacturing facility.

A Rivian delivery van in production. Image source: Rivian Automotive.

Battling climate change

Amazon turned to Rivian to accelerate its plan to shift its delivery fleet to 100% renewable-energy sources. The partnership is key to Amazon's goal of achieving net-zero carbon emissions across all its operations by 2040. 

"Fighting the effects of climate change requires constant innovation and action, and Amazon is partnering with companies who share our passion for inventing new ways to minimize our impact on the environment," Amazon CEO Andy Jassy said in a press release. "Rivian has been an excellent partner in that mission, and we're excited to see our first custom electric delivery vehicles on the road."

The custom vehicles are also designed to be safe and comfortable for drivers. They offer advanced safety features such as 360-degree visibility, sensor detection, collision warnings, and automatic emergency braking. They're built at Rivian's plant in Illinois and have been thoroughly tested by Amazon drivers, who have driven them over 90,000 miles.

In conjunction with the rollout of Rivian's EVs, Amazon is ramping up investment in its logistics network. The online retail titan has already added thousands of charging locations at its delivery sites across the U.S.

Production problems

Amazon's order for 100,000 vehicles is a tremendous opportunity for Rivian -- but also a significant challenge. Semiconductor shortages and other supply chain constraints have dented the EV-maker's ability to manufacture its vans and trucks.

In March, Rivian cut its 2022 production target in half to 25,000 vehicles. The company is also reportedly planning to lay off hundreds of its employees as part of its new cost-cutting plan. 

These challenges have weighed on Rivian's stock price. The automaker's shares are down more than 80% from the highs they reached shortly after its initial public offering (IPO) in November. 

Is Rivian stock a buy?

Following this brutal sell-off, Rivian's stock is now much more reasonably priced. Its shares are currently trading for an enterprise value-to-sales ratio of less than 8, based on its projected revenue for 2022. That's far better than the astronomical heights it reached during the short period of mania that followed Rivian's IPO.

RIVN EV to Revenues (Forward) Chart

RIVN EV to Revenues (Forward) data by YCharts.

Looking further ahead, Rivian's enterprise-value-to-sales ratio falls to roughly 2 based on analyst estimates for 2023. That's a fair price to pay for an innovative upstart in the rapidly expanding EV arena -- particularly for one that's backed by Amazon.

Importantly, Rivian has a massive war chest to fund its operations as it works toward reaching profitability. The company ended the first quarter with more than $16 billion in cash reserves. That should give Rivian the capital it needs to fulfill Amazon's massive order and scale its other production lines.

In addition to its delivery vans, Rivian's other vehicles have also received praise from critics. Its R1T pickup truck was named Motor Trend's Truck of the Year for 2022. Early preorders for the truck have been strong, despite a controversial price hike, showing that Rivian is also enjoying strong demand for its vehicles among consumers. 

Yet an investment in Rivian is certainly not without risk. The upstart faces intensifying competition from more established automakers, such as Ford and General Motors, as well as EV-leader Tesla.

Yet the electric-vehicle industry is set to grow at a rapid pace and likely will be large enough to support more than one winner. Rivian's ties to Amazon and its popular R1T pickup truck give it a solid chance to compete successfully in this important, emerging industry. That makes its stock worth considering for long-term investors.