Business Desk 
Nov 14, 2024
Volkswagen (VW), Europe’s largest carmaker, has announced a major $5.8 billion partnership with Rivian, a US-based electric vehicle (EV) startup and competitor to Tesla.
This collaboration aims to help both companies tackle rising challenges in the electric vehicle (EV) market, which has seen slowing sales and tough competition from Chinese EV makers.
Volkswagen and Rivian sign $5.9 billion deal
As part of the deal, VW would increase its investment in the firm, providing much-needed funds for the American EV maker as it gears up to release a smaller and more affordable SUV called the R2 next year.
This deal would make VW one of the first users of this technology from Rivian, which it intends to roll out within the company.
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The first models of VW utilising the know-how of Rivian would reportedly arrive for buyers in 2027.
The two companies plan to work closely together in California with shared teams of engineers and developers.
In addition to this main centre, three other facilities are being established in North America and Europe to support their joint projects.
Sharing expertise will enable VW and Riviain to reduce development costs and introduce new technologies faster, a major move as both companies face rising costs and an evolving EV industry.
Rivian is also improving the productivity of the organisation, renegotiating contracts and optimising the production chain to reduce losses.
While experts assume that the deal may not be very profitable, Rivian keeps chugging along, particularly with its electric delivery vans. Amazon has already taken on them in large volumes. Indeed, its biggest shareholder, Amazon, aims to receive a total of 100,000 electric vans by the end of the decade.
