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Rivian sinks as the EV maker halts production deal with Mercedes just 3 months after partnership was announced

Rivian EVsRivian recalled 13,000 of its vehicles on Friday.

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  • Rivian said Monday that it halted plans to co-develop electric delivery vans with Mercedes-Benz.
  • The partnership between Mercedes and Rivian was announced just three months ago.
  • Rivian shares tumbled nearly 6% in Monday’s trading session. 

Rivian stock fell on Monday as the electric vehicle maker said plans to co-develop electric delivery vans with Mercedes-Benz in Europe have been halted

Shares of the company were down nearly 6% at 2:15 p.m. ET, trading at $25.72. 

Mercedes will move forward with EV development on its own, specifically to build a new plant in Poland and develop electric vans using its own technology. The two auto makers inked the deal in September. 

“Our decision to pause this partnership with Mercedes-Benz is based upon our focus on prioritizing investments with the highest returns,” Claire McDonough, the CFO of Rivian, said in a statement to Yahoo Finance.

“We have a range of opportunities to invest our capital and are constantly evaluating and refining our analysis of these projects.”

McDonough added: “The pausing of this partnership reflects our process of continually evaluating our major capital projects, while taking into consideration our current and anticipated economic conditions.”

Rivian, which partnered with Amazon in 2019 to produce electric delivery vans for the ecommerce giant, raised around $12 billion in its initial public offering last November. It reported net losses of $5 billion in the first three quarters of this year. The company’s shares are down 74.4% year-to-date.

Mathias Geisen, head of Mercedes-Benz Vans, said the co-venture with Rivian has been based on “a common engineering passion” and “a strong spirit of partnership.”

“That’s why I respect and understand the decision of Rivian to prioritize the delivery of their consumer business and existing commercial business in the near-term,” Geisen said in a statement, adding that “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.”

Read the original article on Business Insider