{"id":33297,"title":"Volkswagen to invest $5bn in Tesla electric car rival","publisher":"Stockmark.IT","author":"Stockmark.IT Website","published":"2024-06-27T04:16:31+00:00","modified":"2024-06-27T04:16:31+00:00","canonical_url":"https://stockmark.it/volkswagen-to-invest-5bn-in-tesla-electric-car-rival/","markdown_url":"https://stockmark.it/volkswagen-to-invest-5bn-in-tesla-electric-car-rival.md","json_url":"https://stockmark.it/volkswagen-to-invest-5bn-in-tesla-electric-car-rival.json","category":"Cars","categories":["Cars","Investment"],"featured_image":"https://i0.wp.com/stockmark.it/wp-content/uploads/stencil.default-2024-06-27T051338.580.jpg?fit=1200%2C800&quality=89&ssl=1","format":"news","language":"en-GB","content":"Volkswagen announced plans to invest $5bn (£3.9bn), or up to 9% of its total revenue, in Rivian’s US electric carmaker. This comes as manufacturers are rethinking their strategies due to uncertain demand.\n\nThe German automaker said that it would initially give $1bn to Rivian. Rivian aims to compete against Tesla by offering “electric adventure vehicles”.\n\nThe joint venture gives VW immediate access Rivian’s technology and opens the door to a further investment of $4bn by 2026.\n\nBoth companies have said that the new venture would be “equally owned and controlled” by VW as well as Rivian.\n\nThe announcement comes at a time when the electric vehicle sector is facing challenges due to a weakening of demand and heightened risk of a possible trade war with China.\n\nIn recent weeks, both the European Union (EU) and the United States have announced that they will impose Tariffs on Chinese Electric Vehicles.\n\nGerman automakers have opposed tariffs, fearing that China will retaliate with measures that would harm manufacturers like BMW and Daimler.\n\nErik Gordon, professor at University of Michigan Ross School of Business told Bloomberg, “the cost of going it alone is just too high.”\n\nThe carmakers have had to reduce production due to a decline in sales and high prices.\n\nFord is one of the companies that has reduced its spending on EVs and delayed new battery-powered factories and models by $12bn.\n\nGeneral Motors said recently that it could take “decades’ for the EV industry to develop.\n\nMary Barra told NBC in early February: “We committed to a future powered by electric vehicles back in 2018.” As we transform, this will take decades. “I couldn’t be prouder of our gas-powered vehicles as well.”\n\nRivian shares surged 50pc on premarket trading in US following the deal. Some analysts called it a lifeline to the business.\n\nRivian shares have fallen more than 90% since listing on Nasdaq 2021.\n\nTesla, owned by Elon Musk, has lost over a fifth of its worth in the last year."}