InsideEVs reported that despite having significant alliances and outside backing, Rivian is still having a hard time, as is typical for startups in the automotive sector.
Rivian and Mercedes-Benz have agreed to a Memorandum of Understanding for the production of massive electric vans, based on a recent MarketWatch report. Now that Rivian is producing 100,000 electric delivery vehicles for Amazon, it can be concluded that it already has the capacity to produce large vans.
In addition, the two companies will construct a European facility that will only produce electric vehicles on one of Mercedes’ current lands, as noted on their signed MoU.
The success of this partnership cannot be guaranteed in its early stage. However, what makes some analysts optimistic about the alliance is the potential that it could act as a stepping stone for Rivian to establish an international presence.
“We view this as a smart strategic move by Rivian to penetrate Europe while ramping production of the EDV [Electric Delivery Vehicle] platform to meet its long-term growth and profitability targets,” Wedbush analyst Daniel Ives explained.
Circumstances remain difficult for Rivian, despite its efforts to fulfill its responsibilities, including Amazon orders, R1S electric SUV deliveries, and the successful deployment of its R1T electric pickup truck.
It is worth noting that the company’s stock may take a long time before going back up as it dumped since the Initial Public Offering.
“We believe Rivian is primed to capture the massive influx of current and future EV demand, capitalizing on a unique global TAM [Total Addressable Market] from a core engineering and design perspective along with the Amazon commercial relationship has the potential to be a major EV stalwart over the next decade.” Ives added.
Ives is partly supported by Baird analyst Ben Kallo. Although he is concerned about the TAM for electric vans, he claimed that Rivian’s agreement with Mercedes would help expand the EV startup’s presence in Europe. Additionally, he thinks combining Rivian’s technology with Mercedes’ scale will yield significant advantages.
“With few details disclosed regarding the proposed partnership, the total addressable market (TAM) for electric vans is still vague,” he wrote. “Despite a lack of clarity, RIVN is set to benefit from Mercedes’ scale while lending from its strong technology position.”