Why Rivian's Mercedes-Benz EV Production Plan Is On Hold

Rivian Automotive is halting plans to build electric vans with Mercedes-Benz in Europe, the company announced on Monday.

Rivian and Mercedes agreed to the partnership just three months ago.

"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," said Rivian Chief Financial Officer Claire McDonough in a statement.

Rivian said it would focus on existing businesses, including building electric delivery vans for Amazon. The two companies signed a contract for Rivian to supply 100,000 electric delivery vans to Amazon. The technology company is Rivian's largest shareholder.

Rivian lost $5 billion in the first three quarters of this year and laid off about 6% of its staff in an effort to cut costs and conserve cash.

The Irvine, Calif. company was briefly worth more than Ford Motor Co. after it went public in November 2021. But it's share price has plummeted nearly 84% from its peak.

Electric vehicle startups are currently under pressure from big-name automakers such as Ford and General Motors to develop electric commercial vans.

Rivian and Mercedes-Benz announced the joint venture on Sept. 8 and the electric vehicles would be produced at Mercedes-Benz's new electric vehicle manufacturing plant in Poland. The automaker has stated that this pause would not negatively impact the company's electrification strategy or the plans for the Poland factory.

Rivian is one of the many electric vehicle manufacturers pressured by supply-chain disruptions. The company cut its 2022 production forecast by half to 25,000 vehicles.