Amazon has already ordered thousands of EDV 500 from Rivian. But the start-up continues to write billions in losses.
(Photo: imago images/ZUMA Wire)
new York It was only in September that Mercedes-Benz Vans and Rivian announced their intention to jointly build electric vans in the future. Only three months later this plan is obsolete again. The US company announced on Monday that the future focus would be on its own customers and products. The cooperation ends before it even begins.
Together, the partners in Eastern Europe wanted to set up a joint assembly plant in order to share the costs. Mercedes announced on Monday that they would now implement such plans on their own. The van division of Mercedes-Benz wants to set up its first purely electric van plant in Poland at the existing Mercedes location in Jawor.
“We have signed a declaration of intent with the Polish government and other Polish business partners,” explained division head Mathias Geisen on Monday. The implementation still depends, among other things, on the granting of state aid for the investment.
Mercedes wants to build vans in Poland on the uniform electric platform VAN.EA planned for 2025. According to Mercedes-Benz, Rivian put the project on hold “due to the reprioritization” of its own projects.
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“Reprioritization” is worded cautiously. They evaluate “large investment projects continuously” and take into account “our current and expected economic conditions,” explained Rivian chief financial officer Claire McDonough in a somewhat cryptic manner. Rivian boss RJ Scaringe was only quoted as saying that “focusing on our consumer business and our existing business customer business” currently offers the most attractive future opportunities.
Rivian shares fell more than six percent on Monday to a new half-year low of $25.61. After a roller coaster ride, the paper is listed this year 75 percent below the level at the end of the previous year.
Pressure to save at Rivian is increasing
Observers consider the step to be a consequence of the growing pressure to save within the company. At home in Illinois, Rivian is struggling with heavy losses due to increased material costs and delivery problems. From January to September, Rivian sold 14,000 vehicles and posted a net loss of more than five billion dollars.
At the same time, the construction of a new factory in Georgia will cost five billion dollars, which Rivian has to finance from reserves. In the summer, the young company had to lay off six percent of its workforce. Cash reserves fell from $17 billion to $13 billion between late March and late September.
Mercedes also wants to build its electric delivery vans in Poland in the future.
(Photo: dpa)
“Rivian wants to focus its forces and resources,” explained Christian Koenig. The car expert has worked for Porsche in North America and runs an electromobility consultancy in Atlanta. Rivian had to save, also against the background that “given the economic situation, it is currently becoming increasingly difficult to raise money on the capital market.”
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According to insiders, Rivian is struggling with the stated production target of 25,000 vehicles by the end of December. It is said that projects such as the partnership with Mercedes-Benz have to take a backseat. Organizational director Frank Klein, whom Rivian recruited from the contract producer Magna in the summer, has stopped practically all side projects and committed the organization entirely to the production goal, which is intended to regain trust on the capital market.
According to Rivian, your own money will last for another year. A capital increase of 1.5 billion dollars is targeted.
Rivian makes electric pickups, actually America’s favorite cars. When the company went public in November 2021, the share shot up from its issue price of $78 to almost $180 within a few days. At that time, the company had only just started to deliver the first electric pickups, but was worth more on the stock exchange than the large established manufacturers such as VW, General Motors and Ford.
Most recently, however, the start-up had to repeatedly lower production targets and recall 13,000 vehicles in October due to a technical defect. One support is the commitment of major shareholder Amazon: The retail giant has ordered 100,000 electric delivery vans.
With material from Reuters.
More: After the stock market crash for electric cars: What’s next for Tesla, Fisker, Lucid and Rivian in 2023?