Rivian withdraws EV business deal with Mercedes-Benz

Rivian, an American electric vehicle manufacturer and automotive technology company announced its joint venture partnership with Mercedes-Benz to build electric vans in Europe in September. However, just three months after the announcement, the company said it is pausing its deal with the German luxury vehicle maker.

Rivian said on Monday, Dec. 12, that it will no longer proceed with its JV deal with Mercedes-Benz at this time. The company said that it must be strategic about its investments thus, it decided to just focus on its other businesses in the meantime.

As per CNN Business, Rivian and Mercedes-Benz originally agreed to team up and set up plans to build two large vans. One of the vans will be made based on the latter’s engineering system, while the other unit will be based on the former’s “second-generation” engineering.

However, things at Rivian are not going well recently. It has laid off six percent of its employees and has been burning through money. In fact, the company ended the month of September with only $13.8 billion in cash, which is a lot less compared to the end of March, when it had almost $17 billion.

The current worsening market condition is another factor that was considered in arriving at the decision to pause its deal with Mercedes-Benz. But then again, Rivian and Mercedes-Benz are not closing the doors for future collaboration. The companies said they could still work together at some point.

“We have decided to pause discussions with Mercedes-Benz Vans regarding the Memorandum of Understanding we signed earlier this year for joint production of electric vans in Europe,” Rivian’s chief executive officer, RJ Scaringe, said in a press release. “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.”

The head of Mercedes-Benz Vans, Mathias Geisen, also said, “Our collaboration with the Rivian team has been based on a common engineering passion and a strong spirit of partnership that is 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.”

He added, “Exploring strategic opportunities with the team at Rivian in the future remains an option, as we share the same strategic ambition: accelerating the EV adoption with benchmark products for our customers.”

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