Mercedes partners with Rivian on electric vans in Europe

BERLIN — Mercedes-Benz Vans and Rivian have signed a memorandum of understanding for a joint venture to produce electric vans in a factory in central or eastern Europe within the next few years, Mercedes-Benz Vans said on Thursday.

The companies are planning ways to produce both of their models on a joint production line, Mercedes said, adding it was also developing a new all-electric van architecture of its own called VAN.EA.

The two companies will make two large vans — one based on Mercedes’ VAN.EA platform and the other based on the Rivian Light Van electric platform — at the plant, the statement said, without disclosing the precise location.

Mercedes also said it would restructure German factories that currently build large Sprinter vans to offset higher costs for electric vehicles.

It will invest 400 millions euros in its factory in Dusseldorf as part of the transition. Mercedes also said it would add “an established plant” from the Mercedes production network based in central and eastern Europe as a third van production site, joining Dusseldorf and Ludwigsfelde, Germany.

The Mercedes plant in Kecskemet, Hungary, is likely to be on the shortlist for the joint factory.

The plant, opened in 2012, currently makes entry Mercedes cars such as A-Class, B-Class and C-Class models. The manufacturer plans to lower the production of such vehicles as part of its strategy of shifting to higher-end models.

The VAN.EA platform will be used for full-electric medium and large commercial vans, Mercedes said Thursday in the release. By 2025, all newly introduced Mercedes van models will be only electric. 

Mercedes also has a partnership with Renault, which builds its Citan and T-Class compact vans as versions of its Kangoo. The vans also have a full-electric option. Mercedes’ medium van, the Vito, also has an electric version.

Bloomberg and Reuters contributed to this report

The collaboration with Mercedes comes at a crucial time for Rivian. The electric van and adventure vehicle company has struggled to ramp up production at its Illinois factory as supply chain disruptions and rising materials prices forced it to cut staff and delay product programmes.

Rivian shares are down nearly 68 percent for the year to date.

Sharing the costs of a European assembly plant with Mercedes should help the startup, which burned through $1.2 billion in the second quarter, conserve cash and save for its second U.S. assembly plant planned for 2025.

Rivian is in a crowded field of startups trying to cash in on demand for electric commercial vans under pressure from established automakers who have moved quickly to counter the threat with electric vans of their own.

Ford Motor re-engineered its popular gasoline-fueled Transit van to run on batteries, and now claims leadership in the U.S. electric commercial van market with nearly 4,000 electric Transits delivered this year.

Stellantis earlier this year signed an agreement with Amazon to provide electric delivery vans. And Rivian has agreed to supply 100,000 electric delivery vans to Amazon by 2030.

Mercedes-Benz Vans said in April its order books were full but factories were struggling with supply chain difficulties.