Rivian Halts Investment in 'Electric Van Production in Europe' with Mercedes-Benz... Stock Drops 6%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] U.S. electric vehicle startup Rivian announced on the 12th (local time) that it will halt its joint venture plan with Mercedes-Benz to produce electric vans in Europe.

According to The Wall Street Journal (WSJ), the two companies had previously unveiled this joint venture plan at the Mercedes-Benz factory located in Poland last September. They decided to abandon it just three months after signing the memorandum of understanding (MOU).

R.J. Scaringe, CEO of Rivian, confirmed the suspension of investment discussions in a statement, explaining, "At this point, we believe that focusing on our existing commercial and consumer businesses offers the most attractive opportunity to maximize Rivian's value in the short term."

He emphasized that Rivian will "pursue the best risk-adjusted capital returns," highlighting that the company will consider risks alongside profits. Rivian's cumulative net loss from the first to third quarter this year reached $5 billion. Since its listing on the New York Stock Exchange last November, Rivian's stock price has plummeted more than 84% from its peak. Recently, the company has also been implementing cost-cutting measures, including laying off 6% of its total workforce.

WSJ reported that Rivian made this decision amid capital market tightening and economic uncertainty, adopting a cautious stance on cash conservation and business expansion.

On the same day, Mercedes-Benz announced in a separate statement that it plans to build a new factory in Poland to independently produce large electric vans using its own technology. However, the company confirmed that since the joint venture with Rivian fell through, the factory's scale will be reduced from the original plan. The company did not disclose when the new factory will begin operations.

Meanwhile, on the afternoon of the same day, Rivian's stock price on the New York Stock Exchange was trading around $25.6, down more than 6% from the previous close.

This content was produced with the assistance of AI translation services.