As the automotive sector undergoes a radical transformation, companies continue to form partnerships. In this context, Volkswagen Group and Tesla rival Rivian have signed a giant joint venture worth $5.8 billion. The two companies are expected to jointly develop electric cars.

Volkswagen and Rivian reach an agreement for $5.8 billion

Volkswagen Group and Tesla rival Rivian have joined forces in a $5.8 billion joint venture. Volkswagen aims to strengthen its position in the electric vehicle market by increasing its investment in the company.

The collaboration between the two companies aims to reduce development costs by combining the expertise of VW and Rivian. It also aims to ensure faster scaling of new technologies. Under the agreement, developers and software engineers from both companies will work in facilities in California, North America and Europe.

At a time when global electric vehicle demand is slowing and competition from Chinese manufacturers is increasing, the agreement is of critical importance for the sector. The joint venture will provide a significant source of financing for Rivian, which is preparing to launch its affordable R2 SUV.

Volkswagen, Europe’s largest automaker, will have the opportunity to integrate Rivian’s technology into its own vehicle range. The first Volkswagen models with Rivian technology are expected to be available around 2027.

Volkswagen is struggling with rising costs, falling sales and a slower-than-expected transition from gasoline and diesel vehicles. In this context, it is preparing to implement cost-cutting measures. Rivian, which has yet to make a profit, is re-negotiating with suppliers to combat the slowing demand for electric vehicles.