Rivian said Monday it would no longer pursue a deal with Mercedes to build electric vans for businesses in Europe.
In a statement, CEO RJ Scaringe said the company needed to be strategic about its 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,” Scaringe said.
A memorandum between Rivian and Mercedes was agreed just three months ago. They had planned to produce two large vans — one based on Mercedes’ engineering and another with “second-generation” Rivian engineering.
The two companies said Monday they may still collaborate in the future.
Rivian, which is known for its electric trucks, generated huge hype when it made its public market debut in 2021. It raised roughly $12 billion in the biggest US offering since Facebook’s debut in 2012.
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But worsening market conditions have hurt the loss-making company, whose shares are down 74% year-to-date.
The company is also burning through money. It ended September with $13.8 billion in cash, compared to almost $17 billion at the end of March. Over the summer, it laid off 6% of its workforce.
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.
Subsidies in US President Joe Biden’s Inflation Reduction Act for car manufacturers who buy US-made components, including EV batteries, are also muddying the investment outlook. Europe claims the act will make it harder for European firms to compete and could divert investment away from the bloc.
— Anna Cooban contributed reporting.