Reactions continue to pour into the big announcement in the automobile sector that Mercedes-Benz Vans and Rivian Automotive (NASDAQ:RIVN) inked a memorandum of understanding to partner on large electric van production and plan to build a new EV production facility together. The two automakers are noted to share common objectives in achieving operating and cost synergies in a bid to appeal to commercial customers at scale.
Wells Fargo views the news positively for Rivian Automotive (RIVN), despite the relatively mixed track record for strategic auto partnerships in general.
"One, investors are focused on cash preservation, and therefore, the shared investment costs are a large positive. Two, the rollout would accelerate RIVN's plans in Europe, and therefore, more rapidly expands the company's total addressable market. Lastly, Mercedes is clearly a high-profile strategic partner, and the release indicates both are exploring additional opportunities for synergies."
Shares of Rivian (RIVN) were up 6.75% at 11:32 a.m. and swapped hands as high as $36.57 earlier in the day. RIVN has almost doubled since hitting a 52-week low of $19.27, but still trades far below the IPO pricing level of $78.
Read more about the Rivian-Mercedes partnership.