Rivian Pauses Its Commercial Van Deal With Mercedes-Benz

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The EV startup has paused negotiations on a joint venture with the German giant to focus on its existing business.

Electric vehicle startup Rivian has announced that its collaboration with Mercedes-Benz to develop commercial vans has been put on hold.

The deal was announced in September and would have seen the two companies invest in and operate a new European factory to produce "large electric vans" for both outfits. Rivian would use its second-generation Rivian Light Van (RLV) platform, while Mercedes would use VAN.EA (MB Vans Electric Architecture), with the potential for future joint projects to be explored.

But now the deal has been paused so that Rivian can focus on its consumer business and its existing commercial business, which includes the electric delivery vans it is producing for Amazon.

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In a statement, Rivian CEO RJ Scaringe explained the decision: "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. 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."

Mercedes-Benz Vans appears to remain open to the idea of a collaboration. Its boss, Mathias Geisen, added that "exploring strategic opportunities with the team at Rivian in the future remains an option."

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In an accompanying letter issued to shareholders, Rivian said that its priority is to ramp up production at its Normal, Illinois facility, where the R1T and R1S are produced. The company still expects to be able to produce 25,000 vehicles this year but has noted that supply chain challenges "will continue to be the limiting factor of [its] production."

While it's a good thing to see Rivian focusing on its core business before expanding its vision, the delay of its Mercedes-Benz collaboration suggests that the company is not as strong as it had hoped to be at this point.

In the third quarter of this year, Rivian posted a loss of $1.72 billion. Hopefully, 2023 will see the EV startup streamline its processes and unlock its full potential with an electric Sprinter van or something similar sometime in the future.

2022-2023 Rivian R1S SUV Front Angle View Rivian

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