Rivian, Mercedes pause plans for JV to build electric vans in Europe

Mercedes-Benz and Rivian are putting on hold a planned collaboration to build electric vans in Europe that was signed just three months ago, the two companies said, as the U.S.-based electric-vehicle maker focuses on its domestic business. 

Mercedes-Benz Vans and Rivian in September signed a memorandum of understanding for a joint venture to produce two large, full-electric vans in a factory in Central or Eastern Europe within the next few years.

The vans were to have been built on a joint production line at a Jawor, Poland, with one based on Mercedes' coming VAN.EA platform and the other based on the Rivian Light Van electric platform. 

But the project has been paused indefinitely, the two companies said Monday. Mercedes in a news release cited Rivian’s “ongoing reprioritization of projects.”

Rivian said it will focus on its consumer and existing commercial business as it tries to become cash flow-positive in its U.S. operations.

"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," Chief Executive Officer RJ Scaringe said in Rivian’s statement.

Rivian's commercial business includes the automaker's RCV platform that underpins the Amazon van that Rivian is building in Illinois. The company has a contract to supply 100,000 electric delivery vans to the e-commerce giant, its biggest investor.

The halt to the partnership comes as Mercedes-Benz Vans reorganizes its European production network, and gives Mercedes one fewer production partner in light-commercial vans, which have historically been the product of joint ventures and production collaborations. 

It confirmed Monday that even without Rivian's involvement it would build its first electric-only vans plant in Jawor pending approval of conditions including the sign-off of subsidies for its investment in the country.

The van maker, a division of Mercedes-Benz, has signed a declaration of intent with the Polish government and other partners to add the van factory to its Jawor site, where it makes combustion engines and batteries for Mercedes-Benz Cars.

The plant will be the fourth in Mercedes-Benz´s European van production network, which it is reorganising towards producing only fully-electric vans built on the VAN.EA platform.

The VAN.EA platform will be used for full-electric medium and large commercial vans, Mercedes has said. By 2025, all newly introduced Mercedes van models will be only electric. 

In addition to Jawor, full-electric vans will be built at Duesseldorf, Germany; Ludwigsfelde, Germany; and Vitoria, Spain. 

The Duessdeldorf factory already builds the current generation full-electric Sprinter large panel van; a new generation will start production there in the second half of next year, Mercedes said. Open-sided electric Sprinters will be built at Ludwigsfelde starting in 2024.

Vitoria will continue to build medium full-electric vans, the EQV and (e)Vito, with the models moving to the VAN.EA architecture in the mid-2020s.

Small full-electric vans (Citan, T-Class) will continue to built by Renault in its Maubeuge, France, factory, on Renault-Nissan Alliance architecture.

Europe’s major van makers are offering more and more full-electric models. Stellantis already offers electric versions of its entire lineup for Citroen, Peugeot and Opel, as well as most Fiat models and vans it builds for Toyota. Renault will soon offer three full-electric van sizes, and Ford is also converting its range.

Reuters and Bloomberg contributed to this report