Volkswagen and Tesla Rival Rivian Announce $5.8bn Joint Venture to Boost EV Development
Volkswagen Group (VW) has increased its investment in a strategic partnership with electric vehicle (EV) maker Rivian, launching a joint venture worth $5.8 billion. This new deal, which builds on an initial commitment of $5 billion from VW, is expected to bolster both companies’ position in the growing EV market, particularly amid intensifying global competition and slowing demand for electric cars.
Rivian’s shares surged by over 9% in after-hours trading following the announcement. The collaboration aims to share vital technologies as both companies look to reduce development costs and accelerate the scaling of new technologies.
Rivian, which has struggled with profitability, stands to benefit significantly from the funding provided by VW, particularly as it prepares to launch its R2 model in 2025 – a more compact and affordable SUV compared to its current lineup. Meanwhile, VW will gain access to Rivian’s cutting-edge EV technology, with the first VW models featuring Rivian technology expected to be available by 2027.
The two companies will also create a new joint development team, with software engineers and developers from both firms working side by side in California. Additionally, three other facilities in North America and Europe will be established to support the venture.
The partnership comes at a critical time for both VW, Europe’s largest car manufacturer, and Rivian, as both companies navigate increasing costs, competitive pressures from Chinese manufacturers, and shifting consumer demand in the EV sector. Rivian, which also produces electric delivery vans for Amazon, is continuing efforts to streamline its operations, including renegotiating supplier contracts and improving manufacturing efficiency.
Rivian’s electric delivery vans, ordered by Amazon in large numbers, are expected to play a key role in its long-term growth strategy, with 100,000 units set for delivery by the end of the decade.
