Volkswagen, the German automotive firm, stated this week that it could make investments as much as $5 billion in Rivian, the American electrical automobile producer that makes electrical pickup vehicles, sport utility autos and supply vans.
The deal will assist Rivian, which has by no means turned a quarterly revenue, make extra electrical autos and assist persuade traders of its stability. It would present Volkswagen with the software program experience that auto analysts say it sorely lacks. And it’s a guess by Volkswagen, which might turn into a big shareholder of Rivian if regulators approve the deal, that Rivian will meet its promise of turning into “the following Tesla,” one thing that has thus far proved elusive.
Rivian, which was based in 2009 as Mainstream Motors, had billions in investments by 2021, together with from Amazon, BlackRock and Ford.
However because the case with many new electrical automobile corporations, Rivian has additionally skilled hiccups in attempting to ramp as much as manufacturing, made more durable by provide chain points through the pandemic. In March, Rivian stated it could pause development of a $5 billion manufacturing unit in Georgia to save cash. (It already has a manufacturing unit in Regular, Unwell.)
Along with giving Rivian entry to Volkswagen’s managerial experience, the funding can be necessary for the corporate’s monetary well being. The corporate loses tens of hundreds of {dollars} for every automobile it makes, and it reported losses of $5.4 billion in 2023, after shedding $6.8 billion the earlier yr.
R.J. Scaringe, Rivian’s founder and chief govt, stated the funding would assist the corporate make a brand new S.U.V. and end development of the manufacturing unit in Georgia. However he additionally famous its significance to the corporate’s backside line.
“That is necessary for us financially,” Mr. Scaringe stated after the partnership was introduced on Tuesday. As of Thursday night, shares of Rivian had been up about 40 p.c for the reason that funding was introduced.
