The German car manufacturer Volkswagen is investing up to $5 billion in the US EV manufacturer Rivian. The companies will work together in a joint venture to develop new technology for electric cars. The ultimate goal is to reduce costs.
Volkswagen is not the first major car manufacturer to take an interest in Rivian. Ford has done it before. The American manufacturer had a 12% stake. But a few years after Rivian went public, Ford sold most of those shares again. Ford also refrained from developing electric cars together, which was previously planned.
Volkswagen Group initially invests $1 billion in Rivian, an amount that could eventually reach $5 billion. For this collaboration, the two car brands are setting up a new company. The joint venture aims to accelerate the development of software for both the Volkswagen Group and Rivian, the companies say. They also want to develop the next generation of electric architecture.
The goal is to “reduce costs per car by increasing scale and accelerating innovation globally.” Among other things, Rivian wants to license its patents in the field of electric architecture to the joint venture.
The first cars with the new technology are expected to hit the market in the second half of the decade, according to the companies.
Volkswagen takes a $1 billion stake in Rivian, the American electric car builder. The two companies announced this after the closing of the New York stock exchange. Rivian’s stock shot up by 30% after the news.
Rivian and Volkswagen say they want to set up a joint venture. As a result, the size of VW’s investment in the US startup could rise to $5 billion by up to 2026.
According to CNBC, the news about the investment comes at exactly the right time: in two days, there will be a meeting for investors in Rivian. They have been complaining for a long time about the pace at which the car builder burns cash.
Rivian says it sells fewer cars than hoped, as demand for electric cars in the US is disappointing. The company therefore announced earlier that it would reduce costs and simplify production. This should lead to the first gain. Rivian suffered a loss of $1.45 billion in the first quarter of this year.
