Rivian Automotive Holding Inc. RIVN is not going ahead with a partnership that it had earlier announced with Mercedes-Benz Group AG MBGAF.
What Happened: Rivian said early on Monday that it is pausing plans to produce commercial electric vehicle vans in Europe and, in the process, will not pursue a memorandum of understanding it signed with Mercedes-Benz in early September.
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The decision to scrap the partnership comes as Rivian deemed that focusing on consumer business and its existing commercial business represents the most attractive near-term opportunities to maximize value to shareholders.
“We share the same goal as Mercedes-Benz Vans, to help the world transition to electric vehicles, and we look forward to exploring opportunities with them at a more appropriate time for Rivian,” said R.J. Scaringe, CEO of Rivian.
The companies previously envisaged manufacturing two large vans on common assembly lines — one based on Mercedes-Benz’s EV platform and the other based on Rivian’s second-generation Rivian Light Van platform.
Mercedes-Benz’s Head of Vans division Mathias Geisen said the pace of electrification at his company remains unchanged.
Why It’s Important: Rivian is among the upstarts in the EV space and is considered a rival to market leader Tesla Inc. TSLA. The company was the first to launch an electric pickup truck, well ahead of Tesla’s Cybertruck, which is still to launch. Rivian also sells an electric SUV and a commercial EV delivery van, with the latter developed in collaboration with Amazon Inc. AMZN.
The stalling of the partnership comes amid an inclement environment, characterized by production challenges, supply shortages and slowing demand
Price Action: In premarket trading, Rivian shares were down 3.26%, at $26.40, according to Benzinga Pro data.
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Image and article originally from www.benzinga.com. Read the original article here.