Rivian Scraps Plan to Make Electric Vans in Europe With Mercedes

A Rivian Waypoint level 2 electric vehicle charger
A Rivian Waypoint level 2 electric vehicle charger in Yosemite National Park, Calif. (Bing Guan/Bloomberg News)

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Rivian Automotive Inc. is shelving plans to jointly build electric vans in Europe with Mercedes-Benz AG, aborting a deal signed just three months ago to share costs and quickly scale up production.

Rivian will no longer pursue the memorandum of understanding signed with the German automaker in September to invest in and jointly operate an existing Mercedes plant, the U.S. company said in a statement Dec. 12. Mercedes said separately that the factory it was going to share with Rivian in Jawor, Poland, will produce medium and large vans that will hit the market in 2025.

“At this point in time, we believe focusing on our consumer business, as well as our existing commercial business, represent the most attractive near-term opportunities to maximize value for Rivian,” CEO RJ Scaringe said in Rivian’s statement.



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Walking away from an agreement that would have eased the path to entering a new market represents another setback to Rivian’s ambitions to challenge Tesla Inc. for electric vehicle leadership. After staging one of the biggest U.S. initial public offerings ever just over a year ago, the company flagged that its factory would only produce half the number of vehicles it has capacity to build this year, due to supply chain issues. It’s also had to cut jobs and recall almost all the EVs it delivered to customers.

Rivian shares fell as much as 5.5% before the start of regular trading Dec. 12 in New York. Mercedes traded down 0.6% as of 11:35 a.m. in Frankfurt.

Mercedes saw partnering with Rivian as a chance to share technology and investment with an upstart as it electrifies its van lineup. While it will still enlarge its Jawor plant that’s been making combustion engines since 2019 and batteries since last year, further expansion to make room for Rivian is now on hold.

“Our collaboration with the Rivian team has been based on a common engineering passion and a strong spirit of partnership,” Mathias Geisen, the head of Mercedes-Benz Vans, said in a statement. “That’s why I respect and understand the decision of Rivian to prioritize the delivery of their consumer business and existing commercial business in the near-term.”

Rivian makes two models for consumers — the R1T pickup and R1S sport utility vehicle — and has a deal to build 100,000 electric delivery vans for Amazon.com Inc., one of its biggest shareholders. Its lone factory is in Normal, Ill., and it’s planning to spend $5 billion on a new plant near Atlanta.

A new Amazon delivery van designed by Rivian

A new Amazon delivery van designed by Rivian on display during the Delivering the Future event at the Amazon Robotics Innovation Hub in Westborough, Mass. in November (M. Scott Brauer/Bloomberg News)

This isn’t the first time Rivian has had a product and manufacturing partnership with an established carmaker fall apart. Plans to build an electric vehicle with Ford Motor Co. — one of Rivian’s big early financial backers — were abandoned in November 2021, shortly after the IPO. Ford pared back its investment in Rivian in the following months.

When the preliminary deal with Mercedes was first announced in September, it sent Rivian shares up 11%, their biggest gain in four months. The EV maker’s stock is now down 74% this year through Dec. 9’s close.

The door to future cooperation between the companies remains open, the two said.

“We share the same goal as Mercedes-Benz Vans, to help the world transition to electric vehicles, and we look forward to exploring opportunities with them at a more appropriate time for Rivian,” Scaringe said.

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