Volkswagen to Invest Up to $5 Billion in Tesla Rival Rivian
German automotive giant Volkswagen (VW) has announced plans to invest up to $5 billion (£3.94 billion) in US-based electric vehicle (EV) maker Rivian, a competitor to Tesla. This strategic investment establishes a joint venture that will enable VW and Rivian to share technology and resources, bolstering their positions in the rapidly growing EV market.
Following the announcement, Rivian’s shares surged by nearly 50%, reflecting investor optimism about the collaboration. The partnership comes at a time when competition among EV manufacturers is intensifying and Western countries are considering tariffs on Chinese imports.
Under the terms of the agreement, VW will make an initial investment of $1 billion in Rivian, with an additional $4 billion to be invested by 2026. This infusion of capital aims to support Rivian’s development and expansion in the EV sector.
Founded in 2009, Rivian has yet to post a quarterly profit, reporting a net loss of over $1.4 billion in the first quarter of 2024. Despite these financial challenges, the company’s innovative electric trucks and SUVs have garnered significant attention and support.
Volkswagen, like other major automakers, faces pressure to transition from fossil fuel-powered vehicles to electric alternatives. The investment in Rivian represents VW’s commitment to advancing its EV capabilities and competing with industry leaders such as Tesla and China’s BYD.