The big number: $5 billion
Volkswagen, the German car company, announced this week that it will invest up to $5 billion in Rivian, the American electric vehicle manufacturer that makes electric pickup trucks, SUVs and vans.
The deal will help Rivian, which has never made a quarterly profit, make more electric vehicles and convince investors of its stability. It will provide Volkswagen with the software expertise that auto analysts say is sorely lacking. And it’s a bet by Volkswagen, which could become a major shareholder in Rivian if regulators approve the deal, that Rivian will deliver on its promise to become “the next Tesla,” something that has so far proven elusive.
Rivian, which was founded in 2009 as Mainstream Motors, had billions in investments in 2021, including from Amazon, BlackRock and Ford.
But like many new electric vehicle companies, Rivian has also faced setbacks in ramping up production, made more difficult by supply chain issues during the pandemic. In March, Rivian said it would pause construction of a $5 billion factory in Georgia to save money. (It already has a factory in Normal, Ill.)
In addition to giving Rivian access to Volkswagen’s management expertise, the investment is also important for the company’s financial health. The company loses tens of thousands of dollars for every vehicle it makes and reported a loss of $5.4 billion in 2023, after a loss of $6.8 billion the year before.
RJ Scaringe, founder and CEO of Rivian, said the investment would help the company make a new SUV and complete construction of its Georgia factory. But he also noted that it is important for the company’s bottom line.
“This is important to us financially,” Mr Scaringe said after the partnership was announced on Tuesday. As of Thursday evening, Rivian shares had risen about 40 percent since the investment was announced.
