Volkswagen And Rivian Team Up To Rival Tesla

Published: Jun 27, 2024 Duration: 00:04:46 Category: People & Blogs

Tags : finance personal finance investing business elon musk Technology Tesla Climate change rivian Rivian stock electric vehicles Tesla Stock Forbes Forbes Media Forbes Magazine Forbes Digital Entrepreneurship volkswagen elon musk tesla affordable electric vehicle Oliver Blume RJ Scaringe

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today on Forbes Volkswagen is investing up to5 billion in rivan upstart electric vehicle maker rivan said earlier this week that Volkswagen is investing up to5 billion in the electric vehicle maker and that the two companies are forming a joint venture to develop an automotive software platform based on rivan technology collaborating with one of the world's biggest automakers could also help rivan reduce some of its component and materials costs rivan shares which rose about 9% on Tuesday later jumped more than 50% to $18.49 in after hours NASDAQ trading in a media call the CEO of Volkswagen group Oliver Bloom said quote initially we are investing $1 billion in rivan and are planning further Investments of up to $4 billion the additional investments will take place through 2026 he said that the additional Investments would happen assuming the partnership achieved specific Tech technical Milestones but he didn't elaborate support for the Irvine California based electric vehicle maker from one of the world's Automotive Giants combined with the ongoing relationship with Amazon its biggest investor and top buyer of its electric delivery trucks may help ensure that rivan launches its next products the midsize R2 electric SUV and compact R3 crossover on time the new funds could also help it resume construction of its Georgia plant which was Mo bald earlier this year as a cost-saving measure importantly the partnership also positions rivian to better compete with Elon musk's Tesla as the leading EV maker aims to Pivot its business model from selling ever greater numbers of vehicles to operating a robo taxi business according to bloom the 50/50 Tech venture between rivian and Volkswagen which doesn't have a name yet will focus on integrating infotainment Wireless connectivity and autonomous driving functions among other things rivan's so-called quote zonal Hardware design and integrated technology platform will be the foundation for the new software platform the companies will share RJ scaring rivian's founder and CEO said quote key for these types of collaborative relationships to work in our view is that there's Mutual benefit to both sides the scale that Volkswagen brings the portfolio of outstanding brands that they bring the opportunity to apply that scale to achieve meaningful cost savings across our build materials and across our business coupled with the ability to drive the acceleration of this technology to more products on the Volkswagen side it really is highly complimentary Volkswagen's initial $1 billion investment is being made through a convertible note offering an additional investment of up to $2 billion in rivan's stock is to take place in two portions of $1 billion each in 2025 and 2026 this according to both companies another $2 billion will come in the form form of a cash payment when the new Venture company begins operating and a loan in 2026 Volkswagen hopes the rivan joint venture will help solve quality issues with the German company's carad software unit which delayed the launch of several models The Wall Street Journal noted that in October 2023 Volkswagen hired an executive who previously worked at Tesla and rivian to quote speed up development forb senior contributor Peter Cohan writes that the complexity of managing a fra software joint venture with Volkswagen which is a far more culturally rigid company than rivan could divert rivian's attention even as Volkswagen continues to manufacture potentially competing products in the US through its Scout Motors business unit according to the company make use of Cohan says that even while Volkswagen has made this deal the company maintains its intentions to compete with rivan according to an email from Petro Zino head of VW corporate Communications that was published by cm BC the German automaker plan to build a $2 billion EV plant in South Carolina for its Scott Motors trucks and SUVs quote has not changed at all Cohan says that the joint venture with rivian could fall short of Volkswagen's goals rivan's over stretched executive team could be so focused on generating positive cash flow that fixing Volkswagen software woses might be a secondary priority for full coverage check out alen ohman's piece on forbes.com this is Kieran Meadows from Forbes thanks for tuning in [Music]

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