Rivian Automotive Holding Inc. (NASDAQ:RIVN) is not going ahead with a partnership that it had earlier announced with Mercedes-Benz Group AG (OTC:MBGAF).
What Happened: Rivian said early on Monday that it is pausing plans to produce commercial electric vehicle vans in Europe and, in the process, will not pursue a memorandum of understanding it signed with Mercedes-Benz in early September.
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The decision to scrap the partnership comes as Rivian deemed that focusing on consumer business and its existing commercial business represents the most attractive near-term opportunities to maximize value to shareholders.
“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,” said R.J. Scaringe, CEO of Rivian.
The companies previously envisaged manufacturing two large vans on common assembly lines — one based on Mercedes-Benz’s EV platform and the other based on Rivian’s second-generation Rivian Light Van platform.
Mercedes-Benz’s Head of Vans division Mathias Geisen said the pace of electrification at his company remains unchanged.
Why It’s Important: Rivian is among the upstarts in the EV space and is considered a rival to market leader Tesla Inc. (NASDAQ:TSLA). The company was the first to launch an electric pickup truck, well ahead of Tesla’s Cybertruck, which is still to launch. Rivian also sells an electric SUV and a commercial EV delivery van, with the latter developed in collaboration with Amazon Inc. (NASDAQ:AMZN).
The stalling of the partnership comes amid an inclement environment, characterized by production challenges, supply shortages and slowing demand
Price Action: In premarket trading, Rivian shares were down 3.26%, at $26.40, according to Benzinga Pro data.
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