Rivian abandons electric van partnership with Mercedes-Benz

Oh Lord, won't you buy me a ... oh

Electric car maker Rivian just can't seem to catch a break - it has posted staggering losses this year, has had to recall nearly every vehicle it sold in October, and now it's announcing a hold on its joint electric van plant with Mercedes-Benz.

Rivian and the German car biz signed a memorandum of understanding in September that would have seen the pair "build an all-new electric-only production facility leveraging an existing Mercedes-Benz site in Central/Eastern Europe," Rivian said in September.

According to the Associated Press, Mercedes-Benz might have lost its partner, although that isn't slowing down its plans to make electric vans. 

"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," said Mathias Geisen, head of Mercedes-Benz Vans.

The German automaker said it will move forward with plans to develop its first dedicated electric van plant in Poland, AP said.

Rivian CEO RJ Scaringe said of the decision that his company still shares M-B Van's electrification goals, and that Rivian "look[s] forward to exploring opportunities with [Mercedes-Benz] at a more appropriate time" for the struggling Tesla competitor. 

Losses and setbacks continue to compound

Rivian's most recent quarterly financial report, which came out in early November, showed that it lost $1.7 billion in Q3 alone, and that it only had cash on hand for three more years of operations.

The company said its ability to continue operating beyond 2025 would largely be dependent on the impact of its Mercedes-Benz deal; with that deal dismissed, Rivian leadership might be starting to circle the wagons to stave off collapse. It's unclear if the decision will help, especially in light of the company's recent recall and failure to get its $5 billion plant near Atlanta, Georgia, off the ground.

Rivian recalled 12,212 vehicles, around 80 percent of those it has produced, in October due to loose bolts that could cause loss of steering control. 

As for the Georgia plant, the state government offered Rivian $1.5 billion in tax incentives to build the facility, which would reportedly employ 7,500 people when opened in 2024 on a 2,000-acre plot. Unfortunately, the plan for the proposed plant hasn't gone smoothly. 

In early October, a Georgia judge rejected the tax break for Rivian's plant, saying that the development authority hadn't shown the project met state requirements for such benefits. Locals near the plant have also sued to stop its construction, and Rivian said in November that it was delaying plans for production of a new SUV at the Georgia plant until 2026

It's unclear whether delays at the Georgia plant would affect other models, or whether Rivian was pushing back its completion date for the entire facility due to delays. A Rivian spokesperson told The Register that litigation surrounding the facility should be resolved next year, but the company couldn't answer additional questions due to ongoing actions in court.

When asked for more details regarding Rivian's decision to withdraw from the Mercedes-Benz deal, CFO Claire McDonough told us that Rivian was prioritizing investments with the highest returns. 

Rivian is constantly evaluating its investments, McDonough said, and the Mercedes decision "reflects our process of continually evaluating our major capital projects, while taking into consideration our current and anticipated economic conditions." 

Shares in Rivian have declined by 75 percent this year, continuing a trend that began when the company went public in 2021. ®

 

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