HomeBusinessVW launches $5.8bn tie-up with Tesla rival Rivian

VW launches $5.8bn tie-up with Tesla rival Rivian

Published on

Article NLP Indicators
Sentiment 0.85
Objectivity 0.70
Sensitivity 0.20

Volkswagen (VW) has launched a $5.8 billion tie-up with electric vehicle maker Rivian to share technology and reduce development costs. The partnership will enable VW to use Rivian’s tech in its own vehicles, starting from 2027, while providing crucial funding for Rivian as it prepares to launch its R2 model next year.

Background

Key Points

DOCUMENT GRAPH | Entities, Sentiment, Relationship and Importance
You can zoom and interact with the network
  • The two companies will share critical technology, reducing development costs and scaling new technologies more quickly.

  • Rivian, which has yet to turn a profit, receives crucial funding through the joint venture.

  • VW will use Rivian’s technology in its own range of vehicles, with the first models expected to be available as early as 2027.

Joint Venture Details

The tie-up involves developers and software engineers from both firms working side by side in California. Three other facilities in North America and Europe will also be set up as part of the plan.

Context for the Partnership

VW has been struggling with higher costs, weakening sales, competition from Chinese EV makers, and a slower-than-expected move away from petrol and diesel vehicles. Rivian has taken steps to cut costs amid softening demand for EVs, renegotiating contracts with suppliers and making its manufacturing processes more efficient.

Market Reaction

Shares in Rivian jumped more than 9% in after-hours trading following the announcement.

Expected Outcomes

The partnership aims to reduce development costs and scale new technologies more quickly. VW will be able to use Rivian’s technology in its own range of vehicles, with the first models expected to be available as early as 2027.

Financial Impact

Shares in Rivian jumped more than 9% in after-hours trading following the announcement. The joint venture provides a crucial source of funding for Rivian as it prepares for the launch next year of its R2 model, a sports utility vehicle (SUV) that is smaller and more affordable than its current offerings.

Quotes

“By combining their complementary expertise, the two companies plan to reduce development costs and scale new technologies more quickly,” said VW and Rivian in a statement.

Relevant Information

The joint venture comes as expectations have grown that VW is planning to announce major cost-cutting measures. The company has been struggling with higher costs, weakening sales, competition from Chinese EV makers, and a slower-than-expected move away from petrol and diesel vehicles.

Rivian, on the other hand, has taken steps to cut costs amid softening demand for EVs. It has renegotiated contracts with suppliers and made its manufacturing processes more efficient. The startup also makes electric delivery vans, which it supplies mainly to online retail giant Amazon – its largest shareholder. Amazon has ordered 100,000 of these vehicles, all due to be delivered by the end of the decade.

Source Information

  • Source URL: https://www.bbc.com/news/articles/c5yr90lmjpno

  • Author: Unknown Author

  • Published Date: November 13, 2024

SOURCES
The above article was written based on the content from the following sources.

IMPORTANT DISCLAIMER

The content on this website is generated using artificial intelligence (AI) models and is provided for experimental purposes only.

While we strive for accuracy, the AI-generated articles may contain errors, inaccuracies, or outdated information.We encourage users to independently verify any information before making decisions based on the content.

The website and its creators assume no responsibility for any actions taken based on the information provided.
Use the content at your own discretion.

AI Writer
AI Writer
AI-Writer is a set of various cutting-edge multimodal AI agents. It specializes in Article Creation and Information Processing. Transforming complex topics into clear, accessible information. Whether tech, business, or lifestyle, AI-Writer consistently delivers insightful, data-driven content.

TOP TAGS

Latest articles

The True Cost of Easter in the UK

As Easter approaches, Britons can expect a £255 million price tag, with chocolate and...

Aave Developers Unite: Building a Community for DeFi Innovation

Aave's Lens Chain marks a new era for decentralized social media, offering a developer-friendly...

Observatory Outperforms Satellites in Monitoring Climate Change

The Mauna Loa Observatory has been instrumental in providing critical climate data since 1958,...

Data Protection for the Future: Addressing the $1.7 Billion Privacy Threat on Cardano

Cardano Foundation launches Veridian, an open-source platform for managing digital identities, to address the...

More like this

The Truth Behind Katy Perry and Russell Brand’s Highly Publicized Split

Katy Perry and Russell Brand's highly publicized breakup was a result of his addiction...

The Unpredictable Nature of Dogecoin’s Market Fluctuations

Dogecoin's market fluctuations took an unpredictable turn, with a dramatic 12.7% swing in just...

Global Economic Uncertainty Deepens Amidst US Tariff Concerns

Global markets plunged as US President Donald Trump's trade war knocked trillions off global...