U.S-based EV maker Rivian said it was pulling out of an agreement with Mercedes in order to focus more on near-term opportunities. Photo by James Atoa/UPI | License Photo
Dec. 12 (UPI) -- California-based EV maker Rivian said Monday it was backing out of an agreement with Mercedes-Benz to produce electric-powered vans in the European market, saying its investments will target other, near-term opportunities.
Rivian said it was "pausing" plans to build its electric vans in Europe and as such backed out of a memorandum of understanding with the German automaker that was signed in September.
"At this point in time, we believe focusing on our consumer business, as well as our existing commercial business, represent the most attractive near-term opportunities to maximize value for Rivian," CEO RJ Scaringe said.
Rivian positioned itself as a competitor to Elon Musk's Tesla after completing its initial public offering last year. Apart from an all-electric van, the company makes the R1T pickup truck and the R1S SUV.
For Mercedes-Benz, the decision was a disappointment, said Mathias Geisen, the head of vans at the German automaker, but it was moving forward in earnest. That includes holding on to plans for a new EV manufacturing plant in Poland.
"While the timeline for our common European production joint venture is now on hold, the pace of our own electrification strategy at Mercedes-Benz Vans remains unchanged," Geisen said.
The bilateral relationship may have been tarnished by elements of U.S. President Joe Biden's signature Inflation Reduction Act, which offers massive tax credits to EV makers provided the vehicles are assembled in North America.
Mercedes pulled out of another market in October -- Russia's. Nissan, Toyota, Renault, Jaguar, Land Rover, General Motors, Aston Martin and Rolls-Royce, all stopped deliveries to the country over war-related concerns. Mercedes sold more than 9,500 vehicles in Russia from January to September.