Volkswagen set to invest up to $5bn into Rivian

Through the agreement, VW and the US-based manufacturer of electric vehicles (EVs) would be able to exchange technologies through a joint venture.

The partnership comes as Western nations seek to put taxes on Chinese goods and as the battle between EV manufacturers heats up.

VW stated in the deal that it will spend $1 billion in the electric truck and SUV manufacturer initially, and an additional $4 billion by 2026.

Rivian was established in 2009 and has not yet reported a quarterly profit. The business experienced a net loss of more than $1.4 billion in the first three months of 2024.

As it attempts to transition away from fossil fuel-powered vehicles, rivals like China's BYD and Tesla have put pressure on VW, along with other major players in the auto industry.

Meanwhile, as demand for large-ticket purchases has been impacted by rising borrowing rates, several EV start-ups have found it difficult to gain traction in the fiercely competitive industry.

Through the collaboration, VW will have instant access to Rivian's software, enabling the German automaker to incorporate it into its vehicles.

Chinese EV manufacturers have been posing a rising threat to global auto industry heavyweights like Volkswagen.

The European Union (EU) issued a warning earlier this month, threatening to increase duties on Chinese electric vehicle imports by up to 38%.

Ahead of the deadline on July 4, officials from China and the EU have had discussions.

Just one month prior, the US announced that import taxes on Chinese electric vehicles would rise from 25% to 100%.

(Sources: bbc.co.uk)