Electric car maker Rivian just can’t take a break – it has posted huge losses this year, had to recall almost every vehicle it sold in October and is now announcing it will shut down its joint electric van plant with Mercedes-Benz.
Rivian and the German auto business signed a letter of intent in September that would see the pair “build an all-new all-electric manufacturing facility utilizing an existing Mercedes-Benz facility in Central/Eastern Europe,” Rivian said in September.
According to that Associated PressMercedes-Benz may have lost its partner, although that doesn’t slow its plans to make electric vans.
“Exploring strategic opportunities with the Rivian team in the future remains an option as we share the same strategic objective: to accelerate the introduction of electric vehicles 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 electric van plant in Poland, AP said.
Commenting on the decision, RJ Scaringe, CEO of Rivian, said his company continues to share MB Van’s electrification goals and that Rivian “Look[s] look forward to exploring opportunities with [Mercedes-Benz] at a more opportune time” for the ailing Tesla competitor.
Losses and setbacks keep piling up
Rivian’s most recent quarterly financial report, released in early November, showed that the company lost $1.7 billion in the third quarter alone, with only three more years of cash to spare.
The company said its ability to continue operations beyond 2025 would depend largely on the impact of its Mercedes-Benz deal; With that deal scrapped, the Rivian leadership could begin circling the wagons to avert collapse. It’s unclear if the decision will help, especially given the company’s recent recall and failure to start up its $5 billion plant near Atlanta, Georgia.
Rivian recalled 12,212 vehicles in October, around 80 percent of Rivian-produced vehicles, due to loose bolts that could result in 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 it opens in 2024 on a 2,000-acre lot. Unfortunately, the plan for the planned facility did not go smoothly.
In early October, a Georgia judge denied the tax break for Rivian’s plant, saying the development agency had failed to show the project met state requirements for such benefits. Residents near the plant have also sued to halt construction, and Rivian said in November it was delaying plans to produce a new SUV at the Georgia plant until 2026.
It’s unclear if delays at the Georgia plant would affect other models, or if Rivian pushed back the completion date for the entire facility due to delays. This was announced by a Rivian spokesman The registry that the litigation surrounding the facility should be settled next year, but the company was unable to answer further questions due to ongoing court cases.
When asked for more details on Rivian’s decision to pull out of the Mercedes-Benz deal, CFO Claire McDonough told us that Rivian is prioritizing investments with the highest returns.
Rivian constantly evaluates its investments, McDonough said, and the Mercedes decision “reflects our process of continually evaluating our major investment projects, taking into account our current and anticipated economic conditions.”
Rivian shares are down 75 percent this year, continuing a trend that began with the company’s IPO in 2021. ®
https://www.theregister.com/2022/12/14/rivian_electric_van_mercedes/ Rivian ends partnership with Mercedes-Benz for electric vans • The Register