By D. Maan, Jadetimes News
VW Announces $5 Billion Investment in Rivian, Creating Strategic Joint Venture
German automotive giant Volkswagen (VW) has revealed plans to invest up to $5 billion (£3.94 billion) in Rivian, a direct competitor to Tesla. This landmark deal establishes a joint venture aimed at facilitating technology sharing between VW and the US based electric vehicle (EV) manufacturer. Following the announcement, Rivian's shares surged nearly 50%.
The collaboration comes amidst escalating competition in the EV sector, exacerbated by Western nations' imposition of tariffs on Chinese imports. Under the terms of the agreement, VW will initially inject $1 billion into Rivian, with an additional $4 billion slated for investment by 2026.
Founded in 2009, Rivian has yet to achieve profitability, reporting a substantial net loss of over $1.4 billion in the first quarter of 2024. VW, along with other automotive industry giants, faces mounting pressure from competitors like Tesla and China's BYD as it transitions away from fossil fuel powered vehicles.
This strategic partnership grants VW immediate access to Rivian's advanced software, enhancing its capabilities in the burgeoning EV market. Moreover, amid increasing global expansion efforts by Chinese EV manufacturers, VW and its peers confront heightened competition.
Recent developments include the European Union's (EU) plans to hike tariffs on Chinese EV imports by up to 38%, prompting diplomatic talks between Chinese and EU officials ahead of a July 4th deadline. The EU's investigation revealed alleged unfair subsidies benefiting Chinese EV firms, triggering objections from China as it denounced the tariffs as protectionist measures.
In a parallel move, the US announced a significant increase in import duties on Chinese EVs, escalating from 25% to 100%. Additionally, Canada is contemplating similar tariff adjustments to align itself with international allies.
Separately, Tesla disclosed plans to recall the majority of its Cybertrucks sold in the US due to issues involving windscreen wipers and exterior trim. This recall affects more than 11,000 vehicles that were introduced to the market at the end of November last year.
