Rivian's Partnership With Mercedes Is Smart Strategy, Say Analysts

As we reported just last week, Rivian is partnering with Mercedes-Benz related to electric vans. Now that analysts have had time to look over the joint partnership plans, it looks like the connection could prove positive for the startup automaker. 

Rivian has already had its fair share of partnerships and major support from others. It's producing electric delivery vans for Amazon, it enjoyed investments and support from Ford for a time, and there are many other companies and investors that have pushed money Rivian's way. However, it's still struggling as startups tend to.

According to a recent article published by MarketWatch, Rivian signed a Memorandum of Understanding related to a joint partnership with Mercedes-Benz to produce large electric vans. We know Rivian already has the ability to manufacture large vans since it's in the process of making some 100,000 electric delivery vans for Amazon. The agreement notes that the automakers will produce the future vans at an electric-only factory in Europe, which will be built on one of Mercedes' existing properties.

While most people may immediately assume that Rivian teaming up with Mercedes could only lead to good things, there's really no way to know how it's going to work out. We thought Rivian and Ford would work together on something magical, but that never panned out. However, the reason some analysts are bullish about the partnership is that it's a potential gateway to Rivian creating an international presence. Wedbush analyst Daniel Ives explained:

“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."

Read These Related Rivian Stories:

Mercedes-Benz And Rivian Announce Strategic Partnership On EV Vans

Rivian Vans Delivered Over 430,000 Amazon Packages Throughout Pilot Program

While Rivian is working to fulfill its massive Amazon order for electric delivery vans, successfully delivering its R1T electric pickup truck, and beginning to deliver its R1S three-row electric SUV, times are still quite tough. The company's stock has tumbled since its IPO, and it may take plenty of time before it works its way back up. However, making the right strategic moves at the right times are key to proving the potential for a successful future business model. Ives added:

---

---

“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."

Ben Kallo, an analyst from Baird, agrees with Ives, at least in part. He said Rivian's deal with Mercedes will work to increase the EV startup's footprint in Europe, though he wonders about the TAM for electric vans. Nonetheless, he believes that pairing Mercedes' scale with Rivian's tech will have notable benefits.

We want your opinion!

What would you like to see on Insideevs.com?

Take our 3 minute survey.

- The InsideEVs team