After Rivian Automotive (NASDAQ: RIVN) struck a deal with Mercedes-Benz last week for a strategic partnership and joint production effort of electric delivery vans, analysts are explaining how the move could help bolster the EV maker’s long-term outlook.

Last week, Rivian and Mercedes-Benz announced they would build all-electric delivery vans for the European market, where the EV company has yet to deliver a vehicle. In the United States, Rivian is currently offering customers the R1T pickup, but its EDV, or Electric Delivery Van, is one of the main focal points of the company’s early production.

In 2019, Rivian found itself a worthy investor and supporter in Amazon, which ordered 100,000 EDV units from the company. Deliveries began this year after extensive pilot programs yielded adequate data for a controlled launch in several cities. The EDV is an early signal of success for Rivian as it struggles to ramp production of the R1T and R1S due to parts shortages. Supply chain issues have been cited by Rivian in the past for delayed production and delivery dates.

However, the EDV’s arrival in Europe and Rivian’s partnership with Mercedes-Benz is bolstering the company’s long-term future, which has been not in doubt but definitely questioned by those with extensive knowledge of the industry. While armchair commentators have speculated that Rivian and other EV startups would not survive the early days of production, Tesla CEO Elon Musk advised the automaker to cut costs and ramp production at its first factory before expanding with new manufacturing facilities within the United States.

The EDV partnership with Mercedes gives Rivian a new bit life, according to numerous analysts. The electric van sector, while predominately controlled by Ford, is still widely up for grabs due to relatively low volumes. While the United States may have a higher concentration of these vehicles, Europe is still lacking sustainable commercial logistics solutions, and Rivian’s EDV product is suitable for the market, Dan Ives of Wedbush explained (via MarketWatch):

“We view this as a smart strategic move by Rivian to penetrate Europe while ramping production of the EDV platform to meet its long-term growth and profitability targets. We believe Rivian is primed to capture the massive influx of current and future EV demand, capitalizing on a unique global TAM 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. Production is improving to at least hit the 25k deliveries this year and we have confidence that customer reservations continue to increase into FY23 with the stage set for a seminal year ahead.”

Ives has a $45 price target on Rivian and an ‘Outperform’ rating on the stock.

amazon, how rivian’s deal with mercedes bolsters the ev maker’s long-term outlook

Credit: Rivian

Additionally, Ben Kallo of Baird Securities has also said the Rivian deal will help the company solve scalability with the production portion of the deal occurring at an existing Mercedes-Benz facility in Europe. Kallo also said that Rivian has a chance to “mount a challenge to Tesla’s current dominance” in the coming years as it continues to address its total scalable market through strategic partnerships like this one:

“With few details disclosed regarding the proposed partnership, the total addressable market for electric vans is still vague. Despite a lack of clarity, RIVN is set to benefit from Mercedes’ scale while lending from its strong technology position. As the world accelerates its shift to EVs, Rivian has a solid opportunity to mount a challenge to Tesla’s current dominance.”

Kallo and Biard hold a $51 price target with an ‘Outperform’ rating on the stock. At the time of writing, shares were down just 1.6 percent on the day, but have surged over 14.5 percent since the partnership was announced last week.

Disclosure: Joey Klender is not a RIVN shareholder.

Keyword: How Rivian’s deal with Mercedes bolsters the EV maker’s long-term outlook

TECH'S NEWS RELATED

Michigan is becoming the center of U.S. battery manufacturing

Michigan, long the automotive manufacturing capital of the United States, is now getting pumped with investment both publicly and privately to build out a series of battery manufacturing plants that will power the wave of electric vehicles coming to market. The demand for domestically produced batteries has reached new ...

View more: Michigan is becoming the center of U.S. battery manufacturing

New York Will Ban Gas Cars By 2035

Everyone get on the bandwagon! We remember being kids and adolescents having adults ask us if all our friends were to jump off a cliff, would we as well. Sadly, we don’t really hear anyone asking that these days and we think we know why. These days it seems like ...

View more: New York Will Ban Gas Cars By 2035

Amazon suspends Staten Island workers who held impromptu strike

REUTERS/Brendan McDermid Amazon has responded swiftly to the impromptu strike at its unionized Staten Island warehouse. The company and workers have confirmed to CNN that about 50 workers were suspended with pay at JFK8 after they occupied the human resources office and refused to work in allegedly unsafe conditions ...

View more: Amazon suspends Staten Island workers who held impromptu strike

Buy an Amazon Echo, Get Two GE Cync Full Color Smart Bulbs

The offer is available exclusively on Amazon until October 30.

View more: Buy an Amazon Echo, Get Two GE Cync Full Color Smart Bulbs

Can A $2,300 Dual-Sport Motorcycle Possibly Be Any Good?

Dork in the Road is testing it out to see how it stacks up against the previous version.

View more: Can A $2,300 Dual-Sport Motorcycle Possibly Be Any Good?

UBCO 2X2ADV Electric Bike Is Now Available In Black

The only two-wheel drive, road-legal electric bike available now comes in two colors.

View more: UBCO 2X2ADV Electric Bike Is Now Available In Black

2022 Volvo V90 Cross Country

A Unique Driving Experience That’s All Volvo Despite what you may have heard, Volvo still makes cars and SUVs with internal combustion engines. And, one more thing, they still make station wagons, too! And while this V90 Cross Country may be bigger and certainly more beautiful than Volvo wagons of ...

View more: 2022 Volvo V90 Cross Country

The official Steam Deck dock is here so now it's a true Switch rival

You can now buy a Steam Deck and an official dock without a reservation

View more: The official Steam Deck dock is here so now it's a true Switch rival

Ford Raises F-150 Lightning Prices Yet Again amid Supply-Chain Nightmare

Speed in a box: RaceBox GPS lap timer and drag meter review

GALLERY: Johnson drives Gen3 Ford Mustang at Bathurst

2023 Supercars calendar expected after Bathurst

ROAD TEST: 2022 Ford F-150 Lightning review

Nine-second turbo LS-swapped AU Falcon wagon

Street Takeover Driver Wrecked, Arrested By Police

2024 GMC Sierra HD Up Close: Fixing What Needed Fixing

Kindle Scribe vs. ReMarkable 2 vs. Kobo Elipsa: Top E Ink Tablets Compared

Latin America MiniGP And Talent Cup Join Dorna’s Road To MotoGP

Amazon begins buying electric trucks NOT from Rivian

Ontario school bus driver shortage cancels 8,000-student cross-country meet

OTHER TECH NEWS

;