By Michael Elkins
American electric vehicle company Rivian Automotive (NASDAQ:RIVN) is down 3.59% in pre-market trading Monday after the company announced a pause in plans to produce its electric commercial vans in Europe and will therefore no longer pursue the Memorandum of Understanding with Mercedes Benz (ETR:MBGn) that was signed earlier this year.
“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.” RJ Scaringe, chief executive officer of Rivian said in a statement. “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.”
The two companies said Monday they may still collaborate in the future.
Mercedes said Monday that it had signed a memorandum of understanding with the Polish government to build its first plant just for electric vans in Jawor, where it currently makes combustion engines and batteries for cars. The build-out would not be affected by Rivian’s decision to withdraw from their deal, according to the company.
“We will continue with full speed and determination to scale up electric vehicle production in our first dedicated electric van plant,” said Mathias Geisen, head of Mercedes-Benz Vans.