New investment: Volkswagen joins forces with the American manufacturer of electric vehicles

The German automobile giant Volkswagen has officially established a joint company based in the USA with the American Rivian, raising the financial ‘stake’ to 5.8 billion dollars for the planned expansion of the production of electric vehicles. At the end of June, the German automobile giant Volkswagen announced that in the coming years it could invest up to five billion dollars in Rivian, providing access to its technology and speeding up software development.

In the initial phase, VW will invest one billion dollars in Rivian, and by 2026 the amount could rise to five billion dollars if the future joint company achieves the targeted results, they announced on June 26.

In July, Germany’s competition regulator approved the announced investment, and VW raised the amount to $5.8 billion on Tuesday.

The German company will allocate 3.5 billion dollars for a direct share in Rivian, and the remaining 2.3 billion will be directed to joint investments, including a billion dollars reserved for a loan.

The partnership will enable VW to begin production of the first models based on Rivian’s electric car technology from 2027, VW Group CEO Oliver Blume said at the official launch of the joint venture. in Palo Alto, California.

The collaboration will focus on a range of technologies, including software systems, computer management and network architecture.

Rivian’s platform should help VW solve software problems that have hampered the development of new models in recent years.

The cooperation will provide Rivian with a key financial incentive as it will lower losses in the conditions of weakening demand for electric vehicles in the USA. In the third quarter, they delivered about ten thousand vehicles, but they operated with a gross loss of 392 million dollars. Their income sank by 34.7 percent, to 874 million dollars.

VW’s and Rivian’s joint venture should begin operations on Wednesday. Its headquarters will be in Palo Alto, America, with planned locations in Europe and North America.

In 2027, the company will start production of Volkswagen, followed by Audi, Scout, Porsche and other brands, said Blume. It will produce all types of vehicles, from compact cars to luxury and sports models, which will guarantee a large volume of production and lower costs. But Rivian’s technology is limited to electric vehicles, the dpa news agency notes.

Rivian was founded in 2009 and specializes in large SUVs and pickup trucks, very popular vehicle categories in the US. They also produce electric delivery vehicles for Amazon, which are now entering the European market.