Rivian and Mercedes-Benz put van partnership 'on hold'

A joint venture between Rivian and Mercedes-Benz has melted away quicker than an ice cube in a cup of warm tea.

According to the plan announced in early September this year, the Rivian and Mercedes-Benz joint venture was going to use a Mercedes-Benz factory in “Central/Eastern Europe” to produce electric vans based on the Mercedes-Benz VAN.EA platform and, later, Rivian’s second-generation light van architecture.

In a statement overnight, Mercedes-Benz said the plan to jointly produce “large all-electric vans is on hold due to Rivian’s on-going reprioritisation of projects”.

Rivian sent a separate letter out to shareholders confirming the pause in its European van plans.

“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,” RJ Scaringe, Rivian’s founder and CEO, said in the correspondence.

As a result of today’s announcement, the Mercedes-Benz engine and battery factory in Jawor, Poland, near the border of Germany and Czechia, will become the fourth vehicle production facility for the automaker’s van division and make the next-generation Sprinter van.

Presently Rivian produces three vehicles: the R1T pickup truck, the closely-related R1S crossover, and the EDV 700 van.

The latter rides on its own dedicated platform, and is currently being exclusively produced for Amazon, one of the automaker’s largest shareholders. The online retailing giant has a standing order for 100,000 of Rivian’s vans.

Thanks to the global semiconductor shortage and other supply chain issues, Rivian has struggled to meet its order book for the R1T and R1S, which the company says runs to over 100,000 vehicles.

Just 25,000 Rivians are expected to be made this year, less than half of its original forecast. As such, Rivian is swimming in red ink, with a third quarter net loss of US$1.7 billion ($2.5 billion).

All these vehicles are manufactured at Rivian’s factory in Normal, Illinois. The plant, around 200km outside of Chicago, was previously owned by Mitsubishi Motors, and made vehicles for Mitsubishi, Chrysler and Dodge, and the defunct Eagle and Plymouth brands.