German auto giant Volkswagen (VW) said it will invest up to $5 billion in Rivian, the US electric vehicle maker that competes with Tesla. The deal will create a joint venture where VW and Rivian can share technology. Following the announcement, shares of Rivian, founded in 2009, jumped nearly 50%. The collaboration between the two companies comes amid increased competition between electric vehicle manufacturers and attempts by Western countries to impose tariffs on Chinese imports. According to the agreement, VW will initially invest $1 billion in the production of electric trucks and SUVs, and will invest another $4 billion by 2026. Rivian was founded in 2009. In 2021, it made a splash in the electric vehicle market with the release of the R1T electric pickup truck, which had a range of up to 643 kilometers on a single charge. However, the company has suffered huge losses in recent years as it tries to speed up production of pickup trucks and SUVs. In the first three months of 2024, the company's net loss amounted to more than $1.4 billion. Cooperation with Volkswagen will allow Rivian to improve its business and enter the European market. VW, like other auto industry giants, is trying to phase out fossil-fuel vehicles, but is struggling to compete with electric vehicle industry leaders Tesla and China's BYD. The partnership with the Americans will give VW access to Rivian's software, allowing the German automaker to use it in its cars. Chinese electric vehicle manufacturers are rapidly capturing markets around the world, which puts additional pressure on other auto industry players. In June, the European Union announced it would raise tariffs on imports of Chinese electric vehicles by 38% from July 4. The only country that objected to this was Germany, which, in the event of China's promised retaliatory measures, risks losing the gigantic Chinese market for top models from BMW, Audi, Mercedes and Porsche. However, the EU is relying on a European Commission investigation that found Chinese electric vehicle makers receive subsidies that put their European rivals at a disadvantage. China responded by saying the tariffs violate international trade rules and accusing the EU of protectionism. A month ago, the US said it would raise tariffs on imports of Chinese electric vehicles from 25% to 100%. Canada said this week it was considering a similar move. Meanwhile, Tesla said Tuesday it is recalling most of its Cybertrucks sold in the U.S. — 11,000 vehicles — due to problems with windshield wipers and exterior trim. Cybertrucks first went on sale in late November last year.
