FILE PHOTO: A Rivian Automotive sign outside the electric truck maker's facility, in Plymouth, Michigan, U.S., July 15, 2022. REUTERS/Kevin Krolicki/File Photo
NEw YORK: Rivian Automotive Inc is walking away from 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, which included plans to invest in and jointly operate an existing Mercedes vans plant, the Irvine, California based company said in a statement yesterday.
Rivian will instead focus on its own consumer and commercial products.
“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 maximise value for Rivian,” chief executive officer RJ Scaringe said in the statement.
The end of the short-lived plan caps a difficult year for Rivian, which has struggled to gain ground on electric vehicle leader Tesla Inc.
The company builds two consumer models at its plant in Normal, Illinois: the battery-powered R1T pickup and R1S sport utility vehicle.
It also has a deal to build 100,000 electric delivery vans for Amazon.com Inc, one of its biggest shareholders.
That diversified product line-up helped stoke interest in Rivian’s November 2021 initial public offering.
Its listing was the sixth-biggest in US history and gave it a war chest of billions of dollars to scale and grow.
Expanding manufacturing outside of the United States was a priority, and Rivian explored its own site in Europe, Bloomberg News reported.
However, it’s been a tough first year of production for Rivian.
In March, the company lowered its full-year output goal to 25,000 vehicles, citing supply chain issues.
Without those hurdles, the plant would have been capable of building 50,000 electric vehicles this year, the company said.
As macro conditions worsened, Rivian later announced it would cut 6% of workforce.
In October, the company had to recall almost all of the vehicles it had built due to a minor structural defect.
Mercedes’s own plans to electrify vans and ramp up output in Europe aren’t affected, Mathias Geisen, head of Mercedes-Benz Vans, said in the statement.
The company will still continue work at a dedicated electric van plant in Jawor, Poland.
“Our collaboration with the Rivian team has been based on a common engineering passion and a strong spirit of partnership,” Geisen said.
“That’s why I respect and understand the decision of Rivian to prioritise the delivery of their consumer business and existing commercial business in the near-term.”
It’s not the first time Rivian has lost its grip on a potential product and manufacturing partnership with an established carmaker. Plans to build an electric vehicle with Ford Motor Co – one of Rivian’s early and bigger financial backers – were abandoned in November 2021, shortly after the initial public offering.
Ford pared back its investment in Rivian in the months that followed.
Rivian also has plans to invest US$5bil (RM22bil) in a new plant to be built outside Atlanta, Georgia. — Bloomberg
