German carmaker Volkswagen is investing up to five billion dollars in US electric car maker Rivian. It plans to form a joint venture with this Tesla competitor to share electric car architecture and software. The move comes at a time when competition is intensifying between electric car manufacturers and Western countries are moving to impose tariffs on their Chinese imports.
Under the agreement, Volkswagen will invest one billion dollars in the maker of electric trucks and sport utility vehicles (SUVs). In a second step, it will inject a further four billion dollars into the venture by 2026. Through the partnership, Volkswagen will gain immediate access to Rivian's software, which the German carmaker will be able to use in its vehicles.
Rivian was founded in 2009, but has so far failed to get out of the red, i.e. into profit. In the first three months of this year, the company posted a net loss of more than $1.4 billion. It is currently struggling with a decline in interest in electric cars in the US.
The companies have defined the cooperation quite narrowly, it will be about software, control computers and network architecture. Crucially, Volkswagen will switch to Rivian's technology and software for new vehicles in the second half of the decade. This could save it a lot of money compared to developing the technology itself, according to DPA.
Automotive giants like Volkswagen are facing increasing competition from Chinese electric car makers who are expanding globally. The European Union warned earlier this month that it would impose an additional duty of up to 38 per cent on imports of Chinese electric cars. The plan came a month after the United States announced it would raise tariffs on Chinese EVs from 25 to 100 percent.