Mercedes-Benz and Rivian plan JV to make electric vans in Europe

BERLIN (Reuters) -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-Benz 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-Benz's 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 Sprinter vans to offset higher costs for electric vehicles.

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% 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 (NYSE:F) Co 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.

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