Rivian pauses Mercedes-Benz electric van joint venture in Europe

Work proceeds on EV startup’s second factory in Georgia
The Rivian plant in Normal, Ill., on July 20, 2022. (Photo for the Atlanta Journal Constitution by Ron Johnson)

Credit: Ron Johnson for the AJC

Credit: Ron Johnson for the AJC

The Rivian plant in Normal, Ill., on July 20, 2022. (Photo for the Atlanta Journal Constitution by Ron Johnson)

Electric vehicle upstart Rivian announced Monday it’s tapping the brakes on a partnership with Mercedes-Benz to manufacture electric vans in Europe.

Rivian said it will not pursue a memorandum of understanding it signed in September with Mercedes-Benz for the joint venture, according to a news release. Work is underway about an hour east of Atlanta for a $5 billion Rivian EV factory, and the European venture would have been Rivian’s third manufacturing site.

RJ Scaringe, Rivian’s CEO, said the suspension of the Mercedes-Benz partnership comes as the company focuses on ramping up consumer vehicle production and becoming profitable.

“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 in the release.

Mathias Geisen, the head of Mercedes-Benz Vans, said the joint venture “is now on hold,” but it will not change his company’s electrification strategy.

Rivian, based in California, operates a factory in Illinois where it builds its flagship R1T trucks and R1S SUVs, as well as electric vans for Amazon.

Rivian’s domestic manufacturing strategy hinges on its announced factory in southern Walton and Morgan counties, which is expected to create 7,500 jobs. The 2,000-acre project site is currently undergoing excavation.

The factory was originally expected to start production in 2024, but those plans have been delayed until 2025. Production of a new crossover vehicle was also delayed until 2026. A Rivian spokesperson declined to provide an update Monday on the Georgia factory to The Atlanta Journal-Constitution.

Jerry Silvio, chairman of the Joint Development Authority (JDA) of Jasper, Morgan, Newton and Walton Counties, said during a Georgia Economic Developers Association award event last month that Rivian is expected to build 4,000 vehicles in Georgia in 2025.

The project enjoys support among many community and business leaders in Walton and Morgan counties, but it also has generated vocal opposition. The state stepped in earlier this year to take control of the property, in part, to more easily bypass local zoning.

Rivian opponents, however, have had success challenging the project’s tax incentives. In September, a local judge shot down roughly $700 million in local project tax breaks that formed a central piece of a $1.5 billion incentive package. The ruling has been appealed.

Despite the legal battles, Rivian’s top officials recently affirmed their commitment to coming to Georgia during a third-quarter earning call with investors.

A note of disclosure

Cox Enterprises, owner of The Atlanta Journal-Constitution, also owns about a 4% stake in Rivian and supplies services to the company. Sandy Schwartz, a Cox executive who oversees the AJC, is on Rivian’s board of directors and holds stock personally. He does not take part in the AJC’s coverage of Rivian.