(qlmbusinessnews.com Thurs. 27th June, 2024) London, UK —

“Rivian Shares Soar as VW Announces Major $5 Billion Investment”

Volkswagen (VW), the renowned German automobile manufacturer, has announced plans to invest up to $5 billion (£3.94 billion) in Rivian, a major competitor to Tesla in the electric vehicle (EV) market. This strategic partnership establishes a joint venture that will enable both VW and the US-based Rivian to share cutting-edge technology.

Following the announcement, Rivian’s shares surged by nearly 50%, reflecting strong market confidence in the collaboration.

This alliance comes amid escalating competition among EV manufacturers and Western nations' moves to impose tariffs on Chinese imports. VW will initially invest $1 billion in Rivian, with a further $4 billion to be invested by 2026.

Founded in 2009, Rivian has yet to achieve quarterly profitability, recording a net loss exceeding $1.4 billion in the first quarter of 2024. Like other automotive giants, VW is striving to transition from traditional fossil fuel vehicles to electric alternatives, facing pressure from industry leaders like Tesla and China's BYD.

EV start-ups are finding it challenging to gain traction in a highly competitive market, especially as higher interest rates dampen demand for big-ticket items. This partnership grants VW immediate access to Rivian’s software, allowing the German carmaker to integrate it into its own vehicles.

olkswagen's $5 Billion Investment in Rivian

Additionally, VW and other major automotive firms are contending with growing competition from Chinese EV manufacturers expanding their global reach. Recently, the European Union (EU) announced plans to increase tariffs on Chinese EV imports by up to 38% following a thorough investigation that concluded Chinese EV companies had been “unfairly subsidised”. In response, China condemned the tariffs as a violation of international trade rules, labelling the investigation as “protectionism”.

This move by the EU follows the US's decision to raise import levies on Chinese EVs from 25% to 100%. Canada has also indicated it may implement similar measures to align with its allies.

In a separate development, Tesla has announced the recall of over 11,000 of its Cybertrucks sold in the US due to issues with windscreen wipers and exterior trim. These vehicles were first introduced to the market in late November last year.

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