Volkswagen Invests $5 Billion in Rivian to Boost Electric Vehicle Technology Amid Rising Global Competition

Volkswagen Invests $5 Billion in Rivian to Boost Electric Vehicle Technology Amid Rising Global Competition
Image credit: VW website 

Volkswagen (VW) announced an investment of up to $5 billion in electric vehicle (EV) maker Rivian, aiming to create a joint venture to share technology. Initially, VW will invest $1 billion in the electric truck and SUV maker, with an additional $4 billion to be invested by 2026. Rivian shares soared by nearly 50% following the news.

This partnership gives VW immediate access to Rivian's software, which the German automaker plans to integrate into its vehicles. VW, like other automotive giants, faces intense competition from companies like Tesla and China's BYD as it transitions from fossil fuel-powered vehicles to EVs. 

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 this, the collaboration with VW is expected to bolster its position in the market. 

The announcement comes amid rising tensions between Western countries and China over EV imports. The European Union (EU) recently warned of plans to increase tariffs on Chinese EV imports by up to 38% following an investigation that concluded Chinese EV companies were unfairly subsidized. China has criticized these tariffs as protectionism and a violation of international trade rules. 

The US also announced plans to increase import levies on Chinese EVs from 25% to 100%, with Canada considering a similar move. These measures reflect the growing competition and protectionist policies in the global EV market.

Separately, Tesla announced a recall of over 11,000 Cybertrucks sold in the US due to issues with their windscreen wipers and exterior trim. The recall affects vehicles that first went on sale at the end of November last year.