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Mercedes and Rivian Plan to Make Vans Together in Europe

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Mercedes-Benz and Rivian announced on Thursday that they would partner to build electric vans in Europe. This is a rare example of cooperation between a traditional automaker and a new challenger.

Mercedes said the two companies will build a factory at one of the German company’s sites in Eastern Europe. Mercedes’ main plant in Eastern Europe is located in Kecskemet, Hungary, southeast of Budapest.

Mercedes and Rivian will make different products at their factories and sell them separately, Matthias Geisen, president of Mercedes-Benz Vans, told reporters on Thursday. He said the main goal of the fifty-fifty joint venture is to share manufacturing costs. But Geissen didn’t rule out the possibility that the two companies would share expertise.

With decades of experience in manufacturing, Mercedes could help Rivian overcome the problems it had with mass-produced cars. Rivian, a maker of electric pickup trucks, SUVs and vans, could potentially offer Mercedes technology in batteries and software.

“If it turns out to be good for both sides, it’s definitely an option, but not a requirement,” says Geisen.

Established automakers have joined forces with battery makers in an attempt to compete with companies like Tesla and Rivian that only make electric vehicles. The collaboration between an electric vehicle start-up and a traditional automaker like Mercedes, whose origins date back to his 19th century, is unusual.

Rivian investor Amazon has ordered 100,000 electric vans from the company, but Rivian is struggling to produce them fast enough. Mercedes hopes to eventually go all-electric in its van production and introduce no new designs with internal combustion engines after 2025.

Delivery vehicles are considered suitable for battery power because they can travel limited distances during the day and recharge during the night.

The agreement, announced Thursday, is a memorandum of understanding, and the companies still need to work out the details and sign the deal, Geisen said. The companies said production at the new facility would begin in the next few years, though a more precise timeline was not disclosed.

The joint venture will be focused on Europe, but Geissen said cooperation in the United States is also possible. “We will be able to share the details as soon as contract negotiations are finalized,” he said.

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