VW launches $5.8bn partnership with Tesla rival Rivian

VW launches .8bn partnership with Tesla rival Rivian


Volkswagen Group (VW) and Tesla rival Rivian have launched a three way partnership, with the German automotive big rising its funding within the partnership.

The 2 corporations say the the deal is now price $5.8bn (£4.55bn) – up from an initial pledge from VW of $5bn.

Shares within the US electrical automobile (EV) maker jumped greater than 9% in after-hours buying and selling following the announcement.

The tie-up will see the corporations sharing vital know-how at a time of slowing world demand for electrical automobiles and elevated competitors from Chinese language rivals.

The three way partnership offers loss-making Rivian with an important supply of funding because it prepares for the launch subsequent yr of its R2 mannequin – a sports activities utility automobile (SUV) that’s smaller and extra inexpensive than its present choices.

It additionally means VW will be capable to use Rivian’s know-how in its personal vary of autos.

The primary VW fashions outfitted with Rivian know-how are anticipated to be obtainable to prospects as early as 2027.

“By combining their complementary experience, the 2 corporations plan to scale back improvement prices and scale new applied sciences extra rapidly,” the 2 corporations stated in an announcement.

Beneath the plan, builders and software program engineers from each corporations will initially work aspect by aspect in California, whereas three different services in North America and Europe will probably be arrange.

It comes as expectations have grown that VW, Europe’s largest automotive maker, is planning to announce main cost-cutting measures.

The group, which additionally consists of manufacturers reminiscent of Audi, Lamborghini and Porsche, has been battling greater prices, weakening gross sales, competitors from Chinese language EV makers and a slower-than-expected transfer away from petrol and diesel autos.

Individually, Rivian has taken steps to chop prices amid softening demand for EVs.

The startup, which has but to show a revenue, has been renegotiating contracts with suppliers and making its manufacturing processes extra environment friendly.

In addition to SUVs, Rivian additionally makes electrical supply vans, which it provides primarily to on-line retail big Amazon – its largest shareholder.

Amazon has ordered 100,000 of the autos, that are all as a result of be delivered by the top of the last decade.



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