EV maker Rivian (RIVN) is setting aside its plans to build electric vans with Mercedes-Benz to double down on its personal and commercial EVs.
Rivian suspends plans to build electric vans with Mercedes
Rivian and Mercedes-Benz signed a Memorandum of Understanding (MOU) in September to establish a joint venture to build electric vans together.
As part of the MOU, the goal was to build two large vans, one based on the Mercedes electric van platform (VAN.EA) and the other based on Rivian’s Light Van (RLV) architecture.
Through the joint venture, the companies planned to build a new factory in Europe in an effort to scale EV van production and drive the transition to clean transportation.
However, it looks like this may no longer be the case. Rivian now claims it will pause its joint venture efforts with Mercedes as it focuses on streamlining the business.
In a statement Monday, Rivian’s chief financial officer Claire Mcdonough started:
The pausing of this partnership reflects our process of continually evaluating our major capital projects, while taking into consideration our current and anticipated economic conditions.
The statement comes after rising material costs and supply chain disruptions led to an over $1.7 billion loss in the third quarter.
Rivian’s CEO RJ Scaringe recently explained the company is looking to maximize efficiency and cut costs wherever needed to focus on becoming cash positive.
The EV maker’s existing commercial van business consists of a 2019 agreement for e-commerce giant Amazon to purchase 100,000 Rivian electric delivery vans (EDV). Amazon says over 1,000 EDVs will debut this holiday season in more than 100 US cities.
Rivian, like most of the auto industry, is facing higher material prices amid ongoing supply chain disruptions. The company is focusing on streamlining its business right now rather than having its hand in several different initiatives.
To get its costs under control, Rivian believes it should focus on scaling its R1 models and fulfilling its 100,000 EDV supply agreement with Amazon right now.
After the company ramps to full production capacity, then it can revisit its electric van plans with Mercedes-Benz, but for now, it needs to focus on solidifying its position in an increasingly competitive EV market.
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