Weekly Brief: Partnerships Hoping to Boost EV and AV Adoption
Mercedes-Benz and Rivian have reached an agreement to build electric vans together in Europe, turning a budding rivalry into a strategic partnership.
The two plan to jointly run a manufacturing plant in Eastern Europe that will build two types of electric vans: one based on Mercedes Vans’ VAN.EA design, the other on Rivian’s second-generation light electric van. Production is expected to start in a couple years. The two will repurpose an existing Mercedes factory rather than build a new one from scratch.
Mercedes-Benz Vans has set an ambitious goal of introducing only electric vans after 2025 but the company lacks the in-house expertise when it comes to batteries and software to make the transition easy and efficient. Rivian, on the other hand, has battery and software expertise in spades but has struggled to ramp up production and scale its operations amid supply chain woes.
In an ideal world, both probably would have preferred to go their own way. Rivian had grand designs of snatching a stranglehold on the European commercial sector the way Tesla did the consumer sector in the US. Germany and the UK were among the countries hoping to become Rivian’s European home away from home. However, with its stock down 68% this year and with capital constraints becoming tighter and investments harder to come by, plus rival Tesla already opening a new factory in Germany and starting to produce electric vans of its own, Rivian saw the wisdom of a partnership with a deep-pocketed legacy automaker. Its stock rose 11% on the news and its market cap jumped $3Bn in a matter of hours.
In other news last week, Uber will start making fully autonomous deliveries on its Uber Eats platform this autumn in Houston, Texas and Mountain View, California. The ride-hailing behemoth will use Nuro autonomous delivery vehicles with no drivers or safety operators on board. Customers won’t know if they are receiving a food delivery from a human or a bot until the vehicle shows up. They will be charged the same price either way.
The deal cements Nuro as one of the most advanced and promising companies in the AV industry. The start-up has already struck deals with Walmart, CVS Pharmacy, FedEx for parcel delivery and Domino’s for pizza delivery. Uber Eats will use Nuro’s R2 delivery bot that analyzes its surroundings with a mix of LiDAR, cameras and radar.
Finally, it’s been a rocky few months ever since Cruise debuted its commercial robo-taxi service in San Francisco. The day after it launched, one of its robo-taxis got into a serious accident when its software “incorrectly predicted” the path of an oncoming vehicle, according to a National Highway Traffic Safety Administration investigation. Two were left injured. Two weeks ago the company recalled 80 of its robo-taxis and outfitted them with updated self-driving software to address the problem.
Then last week NBC’s Today Show went to film a segment in a Cruise robo-taxi but the thing wouldn’t start. CEO Kyle Vogt chalked it up to an “infrequent bug” and says it’s already fixed. I wouldn’t be too confident if I lived in San Francisco. Unlike Waymo, which has bided its time and taken an extremely gradual and cautious approach to commercialization, Cruise seems to have adopted the opposite mentality, pushing hard for first-to-market advantage and the cachet and media attention that comes with it. Careful what you wish for.
