Rivian Halts Partnership with Mercedes-Benz to Focus on Profitability

On December 11, Rivian Automotive, Inc. (NASDAQ: RIVN) declared it was pausing its agreement with Mercedes-Benz AG to work together to produce electric vans in Europe.  The companies had announced a memorandum of understanding on this initiative in September.  Rivian and Mercedes had planned to build one van based on Mercedes’ engineering technology and another predicated on Rivian’s engineering know-how.

The odd element about the announcement is the real reason for the shelving of the partnership remains unclear.  Neither company alluded to a lack of demand for vans, nor did the auto makers cite higher than expected capital costs.  Indeed, Rivian has a cash-rich balance sheet (see below).

Each company’s leader provided essentially non-answers.  Rivian CEO RJ Scaringe said he wanted to focus on the consumer business, saying that represented “the most attractive near-term opportunities to maximize value for Rivian.”  Mathias Geisen, head of Mercedes-Benz Vans, said that “exploring strategic opportunities with the team at Rivian remains an option.”

Read the source article at thedeepdive.ca