It is a spectacular cooperation between two very different partners: the long-established Mercedes-Benz group from Stuttgart, which, like most manufacturers, relies heavily on electromobility, is entering into a strategic partnership with the American electric car start-up Rivian.

The companies announced this on Thursday.

Specifically, it should be about the joint production of large electric delivery vans, as Mathias Geisen said in a video conference with journalists.

Geisen has been in charge of the van division of Mercedes-Benz since the beginning of the year, in which the group has bundled the business with vans such as the Mercedes Sprinter and motorhomes.

Roland Lindner

Business correspondent in New York.

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Gustave parts

Business correspondent in Stuttgart.

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The two partners want to set up a new vehicle plant for large vans, in which both Mercedes and Rivian vehicles will roll off the assembly line.

For cost reasons, various existing Mercedes locations in Central and Eastern Europe are under discussion, said Geisen.

However, the two German Transporter plants in Düsseldorf and Ludwigsfelde are not included.

We are still sticking to them and are not planning any downsizing there.

Negotiations with the possible locations for the new plant were ongoing, said Geisen.

The manager did not reveal which places these were.

It was also agreed with Rivian not to disclose the investment sum.

The conversion of the plant in Düsseldorf, which will also produce electric Mercedes models in the future, will cost around 400 million euros.

The investment sum can be derived from this.

It is also still unclear when the jointly produced cars will be on the roads.

Production of the new electric van platform from Mercedes is scheduled to start in 2025.

In the following years, the joint production with Rivian should start.

Van division to become more profitable

With sales of 7.8 billion euros in the first half of the year, the van division accounted for a good tenth of the entire Mercedes group, but with an adjusted return on sales of 11 percent it is significantly less profitable than the car division.

Mercedes CEO Ola Källenius is trimming the company much more towards margins than his predecessor Dieter Zetsche, who was more focused on mass, i.e. wanted to sell more vehicles.

The cooperation with Rivian should now help to make the division more profitable.

As an example, Geisen named a paint shop, which is particularly expensive for vehicles that are around 8 meters long.

In addition, the joint use of the plant should increase flexibility.

"We don't yet know when customers will opt for electric vans," said Geisen.

In contrast to private cars, when it comes to commercial vehicles, customers are almost exclusively concerned with how expensive electric delivery vans are overall compared to vehicles with combustion engines.

In addition to cooperation in production, the companies are also considering cooperation in other areas, said Geisen.

According to a company spokesman, this includes the use of common components and “purchasing synergies”.

Mercedes has a lot of experience in production and industrialization, said Geisen.

Rivian, on the other hand, is technologically very strong, said Geisen when asked whether Rivian could do something that Mercedes couldn't.

Delivery bottlenecks hinder production

Rivian is one of a group of young American electric car manufacturers that grew up in Tesla's slipstream.

The company was founded in 2009 by RJ Scaringe, who initially aimed to build sports cars but later focused on pickup trucks, sport utility vehicles (SUVs) and commercial vans.

But it was a long way, Rivian only delivered its first cars at the end of last year.

So far, the company has only one factory in the US state of Illinois, and another is planned in the state of Georgia.

Rivian actually wanted to deliver 50,000 vehicles this year, but the target has been reduced to 25,000 due to bottlenecks in the supply chain.

One of the biggest challenges is ramping up production as quickly as possible.

According to the latest information, Rivian has 98,000 pre-orders for its pickups and SUVs.

The online retailer Amazon is by far the most important customer for delivery vans. It has ordered a total of 100,000 copies, the first of which were delivered a few months ago.

Amazon is also a major shareholder in Rivian, as is automaker Ford.

So far, Rivian has been in the red.

For the second quarter of this year, the company reported a net loss of $1.7 billion.

It also recently forecast a significantly higher full-year loss due to sharply rising costs.

The company went public last November, but like some other electric car manufacturers, it has recently had a difficult time there.

Since the beginning of the year, the share price has fallen by almost two-thirds.

The cooperation with Mercedes was received very positively on Thursday, however, with the price rising by more than 9 percent to $36.40.

However, it is still a long way from the issue price of $78 at the time of the IPO.

This year's share price setbacks have caused Amazon and Ford to make significant value adjustments to their holdings.

With a drop of more than 3 percent at times, the Mercedes share was one of the losers in the Dax.