VW to invest up to $5bn in Tesla rival Rivian
Volkswagen (VW), the prominent German automaker, has announced plans to invest up to $5 billion (£3.94 billion) in Rivian, a Tesla competitor based in the US. This investment sets the stage for a joint venture aimed at sharing technology between the two companies. Following the news, Rivian’s shares surged nearly 50%.
The partnership underscores the escalating competition among electric vehicle (EV) manufacturers, coinciding with Western nations imposing tariffs on Chinese imports. Initially, VW will inject $1 billion into Rivian, with an additional $4 billion slated by 2026.
Established in 2009, Rivian has yet to achieve profitability, reporting a $1.5 billion loss for the first quarter 2024. Like other industry giants, VW faces mounting pressure from rivals like Tesla and China’s BYD as it navigates the transition from fossil fuel-powered vehicles.
The collaboration grants VW immediate access to Rivian’s software, enhancing the German automaker’s EV capabilities. Moreover, amid heightened competition from expanding Chinese EV manufacturers globally, the European Union recently announced plans to increase tariffs on Chinese EV imports, prompting trade tensions and discussions between Chinese and EU officials ahead of a looming deadline.
This week, Canada said that it was considering a similar move to align itself with allies.
