Rivian Backs Away From Van Partnership With Mercedes After Just 3 Months

The automakers planned to build vans alongside each other under one roof in Europe, but Rivian says it needs to focus on its consumer business right now.

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One of Rivian's electric vans for Amazon in production in the automaker's Normal, Illinois facility.
One of Rivian’s electric vans for Amazon in production in the automaker’s Normal, Illinois facility.
Image: Rivian

Back in September, Rivian and Mercedes-Benz signed a “memorandum of understanding to initiate a strategic partnership” on commercial battery-electric vans. The two companies intended to build vehicles together under one roof in central or eastern Europe, though they wouldn’t build the same vans. Each was to use its own platform, which made the potential benefits of the synergy a little unclear, at least to those of us on the outside.

The automakers may have felt the same way, as Rivian announced Monday it will no longer pursue the joint venture with Mercedes, just 12 weeks after it was publicized. Rivian CEO RJ Scaringe offered the following in a press release about the news:

“We’ve 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. As we evaluate growth opportunities, we pursue the best risk-adjusted returns on our capital investments. 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. 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.”

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The last sentence couches this as more of a delay than a hard break, though of course the “memorandum of understanding” was never binding to begin with, so Rivian could just be ducking out of this one quietly. Mercedes-Benz Vans chief Mathias Geisen said in the same release that he “respects and understands the decision of Rivian to prioritize the delivery of their consumer business and existing commercial business,” so it appears there’s no hard feelings.

It’s understandable too, as Rivian is losing up to six figures on every single R1T or R1S that leaves its assembly line. Another story from Reuters that broke in November placed the average cost of goods in every vehicle at $220,000 — despite an average sale price of $81,000.

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As for Mercedes, Geisen says this doesn’t affect Stuttgart’s plans for the development of its own electric workhorse. The second-generation eSprinter will be unveiled in about two months, but the company says it achieved almost 300 miles of range in testing with the largest battery equipped, carrying about 220 pounds of cargo.

That’s impressive longevity — though it could very well carry an impressive price if the battery sizes up around the 110 or 120 kWh mark, as it’s been rumored to. The outgoing eSprinter with the 55 kWh pack goes for the equivalent of almost $43,000 in the U.K. and grants a little more than 90 miles on a charge.