Volkswagen Partners with Rivian in $5.8 Billion Deal to Boost Electric Cars
Volkswagen (VW) and electric vehicle (EV) startup Rivian have joined forces in a $5.8 billion partnership, increasing VW’s earlier $5 billion investment. This deal allows the two companies to share technology and reduce costs as they face slower demand for EVs and rising competition from Chinese carmakers, BBC reports.
For Rivian, this partnership provides much-needed funding as it prepares to launch a smaller and more affordable electric SUV, the R2, next year. BBC notes that Rivian, which is still losing money, also produces electric delivery vans, with Amazon as its biggest customer. Amazon has ordered 100,000 of these vans, which will be delivered by the end of the decade.
On VW’s side, the partnership means the German carmaker can use Rivian’s technology in its future vehicles. According to BBC, the first VW cars with Rivian technology are expected in 2027. This collaboration will help VW reduce development costs and speed up its push into the competitive EV market.
The companies have already started working together. BBC reports that engineers and software developers from both firms will collaborate in California, with more facilities planned in North America and Europe.
VW, Europe’s largest carmaker, has been facing challenges, including weaker sales, higher costs, and tougher competition in the EV market. It is also adjusting to a slower-than-expected shift away from petrol and diesel cars. BBC adds that VW is expected to announce cost-cutting measures soon to stay competitive.
This partnership highlights the increasing pressure on automakers to innovate and reduce costs as global EV demand softens. BBC points out that Rivian has already been renegotiating contracts with suppliers and improving its manufacturing processes to save money.
Together, VW and Rivian hope to combine their expertise to scale up EV technology more efficiently, creating a win-win situation for both companies in a challenging market.
Source: BBC
https://www.bbc.com/news/articles/c5yr90lmjpno