Shares of Rivian (NASDAQ:RIVN) stock opened in the red after the electric vehicle (EV) company announced that it had scrapped its plans to build EVs with Mercedes-Benz (OTCMKTS:MBGYY). In September, two automakers had signed a memorandum of understanding (MOU) that would see them develop separate EVs on Mercedes’ assembly line.
“At this point in time, we believe focusing on our consumer business, as well as our existing commercial business, represent the most attractive near-term opportunities to maximize value for Rivian,” explained Rivian CEO RJ Scaringe.
Rivian had previously planned to build vans at Mercedes’ plant in Jawor, Poland, using its Rivian Light Van (RLV) platform. With Rivian no longer pursuing the MOU, Mercedes will now build medium and large vans that will be available in 2025.
RIVN Stock: Rivian and Mercedes Toss MOU
However, the two companies hinted that a potential future collaboration is still possible. “We share the same goal as Mercedes-Benz Vans, to help the world transition to electric vehicles, and we look forward to exploring opportunities with them at a more appropriate time for Rivian,” said Scaringe.
Back in November of 2021, Rivian cancelled its plans to jointly build an EV with Ford (NYSE:F). Ford had kicked off the plan after investing $500 million into the company in 2019. Similarly, Ford also stated that it may collaborate with Rivian in the future, although there was been no word since the cancellation.
On the other hand, Rivian will soon become a member of a broad market index, the Nasdaq 100. On Dec. 19, before the start of trading, RIVN will officially be added to the index. The index does not carry a minimum market capitalization requirement, although each member must have an average daily trading volume of at least 200,000 shares. RIVN boasts an average daily volume of over 15 million shares.
This is a major plus for the blossoming EV company, as Nasdaq 100 inclusion will provide increased exposure and liquidity. Exchange-traded funds (ETFs), like the Invesco QQQ Trust Series 1 (NASDAQ:QQQ), must track the index, meaning that they will have to purchase shares of RIVN.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.