Rivian abandons electric van partnership with Mercedes-Benz
- Reference: 1670999405
- News link: https://www.theregister.co.uk/2022/12/14/rivian_electric_van_mercedes/
- Source link:
Rivian and the German car biz signed a memorandum of understanding in September that would have seen the pair "build an all-new electric-only production facility leveraging an existing Mercedes-Benz site in Central/Eastern Europe," Rivian [1]said in September.
According to the Associated Press , Mercedes-Benz might have lost its partner, although that [2]isn't slowing down its plans to make electric vans.
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"Exploring strategic opportunities with the team at Rivian in the future remains an option, as we share the same strategic ambition: accelerating the EV adoption with benchmark products for our customers," said Mathias Geisen, head of Mercedes-Benz Vans.
[4]
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The German automaker said it will move forward with plans to develop its first dedicated electric van plant in Poland, AP said.
Rivian CEO RJ Scaringe said of the decision that his company still shares M-B Van's electrification goals, and that Rivian "look[s] forward to exploring opportunities with [Mercedes-Benz] at a more appropriate time" for the struggling Tesla competitor.
Losses and setbacks continue to compound
Rivian's most recent quarterly financial report, which came out in early November, showed that it [6]lost $1.7 billion in Q3 alone , and that it only had cash on hand for three more years of operations.
The company said its ability to continue operating beyond 2025 would largely be dependent on the impact of its Mercedes-Benz deal; with that deal dismissed, Rivian leadership might be starting to circle the wagons to stave off collapse. It's unclear if the decision will help, especially in light of the company's recent recall and failure to get its $5 billion plant near Atlanta, Georgia, off the ground.
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Rivian recalled [8]12,212 vehicles , around 80 percent of those it has produced, in October due to loose bolts that could cause loss of steering control.
As for the Georgia plant, the state government offered Rivian [9]$1.5 billion in tax incentives to build the facility, which would reportedly employ 7,500 people when opened in 2024 on a 2,000-acre plot. Unfortunately, the plan for the proposed plant hasn't gone smoothly.
[10]Tesla rival Rivian posts losses of $1.7b, with worse to come
[11]Rivian recalls nearly every vehicle it has sold
[12]Apple's secret car team tosses keys to Lamborghini lead
[13]Tesla reports two more fatal Autopilot accidents to the NHTSA
In early October, a Georgia judge [14]rejected the tax break for Rivian's plant, saying that the development authority hadn't shown the project met state requirements for such benefits. Locals near the plant have also [15]sued to stop its construction , and Rivian said in November that it was delaying plans for production of a new SUV at the Georgia plant [16]until 2026 .
It's unclear whether delays at the Georgia plant would affect other models, or whether Rivian was pushing back its completion date for the entire facility due to delays. A Rivian spokesperson told The Register that litigation surrounding the facility should be resolved next year, but the company couldn't answer additional questions due to ongoing actions in court.
When asked for more details regarding Rivian's decision to withdraw from the Mercedes-Benz deal, CFO Claire McDonough told us that Rivian was prioritizing investments with the highest returns.
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Rivian is constantly evaluating its investments, McDonough said, and the Mercedes decision "reflects our process of continually evaluating our major capital projects, while taking into consideration our current and anticipated economic conditions."
Shares in Rivian have declined by 75 percent this year, continuing a trend that began when the company went public in 2021. ®
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[1] https://rivian.com/newsroom/article/mercedes-benz-vans-and-rivian-move-to-partner-on-electric-van-production
[2] https://apnews.com/article/technology-europe-business-california-amazoncom-inc-2d2a55a377b608aa23d04d06b999a023
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y5ms1Mf7eY9qQSf0EZDFSgAAAJg&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y5ms1Mf7eY9qQSf0EZDFSgAAAJg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y5ms1Mf7eY9qQSf0EZDFSgAAAJg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[6] https://www.theregister.com/2022/11/10/rivian_q3_losses/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y5ms1Mf7eY9qQSf0EZDFSgAAAJg&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2022/10/10/rivian_recalls_cars/
[9] https://www.11alive.com/article/news/local/rivian-electric-car-georgia-incentives-kemp/85-c08c9833-8973-46b3-acc1-b84393268374
[10] https://www.theregister.com/2022/11/10/rivian_q3_losses/
[11] https://www.theregister.com/2022/10/10/rivian_recalls_cars/
[12] https://www.theregister.com/2022/07/28/lamborghini_apple_car/
[13] https://www.theregister.com/2022/11/16/tesla_nhtsa_report/
[14] https://fortune.com/2022/10/01/rivian-georgia-plant-property-tax-break-judge-ruling-5-billion/
[15] https://www.ajc.com/news/rivian-opponents-sue-to-halt-excavation-work-on-georgia-ev-plant-site/KOHWSDJA7REAJAQYAG3KJ4C6ZQ/
[16] https://www.ajc.com/news/rivian-delays-production-of-new-crossover-at-georgia-ev-plant-to-2026/6NEF3M2LXVHPFHSY4YGR6SXYZU/
[17] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/personaltech&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y5ms1Mf7eY9qQSf0EZDFSgAAAJg&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[18] https://whitepapers.theregister.com/
Re: A telling statement...
High risk, high return didn't work too well for John DeLorean.
Re: A telling statement...
That's what I consider Teslas to be, electric DeLoreans..
Just what we don't need... more electric vehicles at a time when we can barely generate enough electricity to keep ourselves warm!!
You dont really understand the Problem, do you?
There is zero problem with energy generation capacity in any country in the western world. What there is, is a price problem. This initially was caused because of the justifiable decision to stop using Russian Oil and Gas, which was a major supplier of the fuel for power generation plants across the world. As nations scrambled for new supplies, then naturally prices went up. However, the majority of the price rise now is caused by profiteering, as by now, most Russian oil and gas has found new homes (in India and China), which means the oil and gas they previously purchased is being bought by western nations. As such prices should have returned to a much lower level. However, OPEC, and the oil companies are deliberately continuing to throttle supply to keep prices high and make obscene profits.
Governments should really do more about this, for example force North Sea oil, American crude, Canadian shale oil, Australian Gas, etc. to be sold, not at the world benchmark price, but at a reasonable, close to before the Ukraine War prices, and it would undercut the world market, and you would see prices collapse back to normal levels quite quickly. They wont though, because the oil companies have excellent lobby groups, and governments dont bite the hand that feeds them.
Still more electric cars wont have any effect on the amount of energy available to power your home and run your heaters. That's purely a price problem.
They won't though, because the oil companies have excellent lobby groups, and governments dont bite the hand that feeds them.
The oil companies don't need lobbyists for that - don't forget that the vast majority of what you pay for fuel is tax, which is why this whole BS of government ministers "talking to the industry to lower prices" is a lot of nonsense, solely aimed at scoring some points with the voters.
Not very surprising
Mercedes are already capable of building electric cars and vans, so Rivian would have had to have been bringing something pretty unique to the design for it to be worth Mercedes' partnering with them. As I see it, Rivian doesn't do anything any other vehicle manufacturer can't do. The lack of availability of electric vehicles is due to a lack of suitable manufacturing capacity for vehicles and batteries, not because of a lack of engineering skills. (i.e. Rivian probably had to bring money to the table to help build a plant, and I'd hazard a guess they can't afford that.)
Re: Not very surprising
At least Rivian has an original design with a lot of well thought out practical details. Mercedes' design language for cars seems to have been derived from hearses. The vans are better, but their interior lags a few years behind the cars in terms of technology and dashboard unless you buy the much more expensive Vitos.
A telling statement...
"CFO Claire McDonough told us that Rivian was prioritizing investments with the highest returns."
I consider the above a very telling statement. The Auto Industry, as a rule, does not work on high returns, they work on low margins, but high quantity. Mercedes would be no different. That Rivian chose to walk away from a partnership with Mercedes, which likely would have delivered solid, continual, yet relatively low margin revenue, in order to chase high return investments says quite a lot. Either their management knows nothing about the Auto Industry and they think they can try and position themselves to be a high return auto maker (note: They can't), or their financial position is even more precarious than feared and they NEED to chase the high return/high risk investments, just to survive a little longer.
Neither bodes well for the long term...