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Rivian Automotive (NASDAQ:RIVN) announced it signed a Memorandum of Understanding to initiate a strategic partnership with Mercedes-Benz Vans on Thursday, with the companies agreeing to create a joint venture to invest in and operate a factory in Europe that will produce large electric vans for both companies.
Following the report, a BofA analyst provided a research note.
“The companies are currently considering a plan to build a production facility that would leverage an existing Mercedes-Benz site in Central / Eastern Europe,” said the analyst, who maintained a Buy rating and $70 price target on Rivian.
“Ultimately, we view this news as positive for RIVN as the partnership will help accelerate its expansion into Europe and do so with a well-capitalized partner that has deep manufacturing expertise,” added the analyst.
BofA believes Mercedes-Benz also brings a “best-in-class brand name that garners credibility,” but while the economics of the partnership are still to be determined, they expect the “shared economics may not be as robust as on a standalone, although it does provide less risk.
