Volkswagen Group (VW) and Tesla rival Rivian have launched a three way partnership, with the German automobile big growing its funding within the partnership.
The 2 firms say the the deal is now value $5.8bn (£4.55bn) – up from an initial pledge from VW of $5bn.
Shares within the US electrical car (EV) maker jumped greater than 9% in after-hours buying and selling following the announcement.
The tie-up will see the companies sharing crucial expertise at a time of slowing international demand for electrical vehicles and elevated competitors from Chinese language rivals.
The three way partnership supplies loss-making Rivian with a vital supply of funding because it prepares for the launch subsequent 12 months of its R2 mannequin – a sports activities utility car (SUV) that’s smaller and extra reasonably priced than its present choices.
It additionally means VW will be capable of use Rivian’s expertise in its personal vary of autos.
The primary VW fashions outfitted with Rivian expertise are anticipated to be accessible to clients as early as 2027.
“By combining their complementary experience, the 2 firms plan to cut back improvement prices and scale new applied sciences extra shortly,” the 2 firms stated in an announcement.
Underneath the plan, builders and software program engineers from each companies will initially work facet by facet in California, whereas three different amenities in North America and Europe might be arrange.
It comes as expectations have grown that VW, Europe’s largest automobile maker, is planning to announce main cost-cutting measures.
The group, which additionally consists of manufacturers equivalent to Audi, Lamborghini and Porsche, has been fighting greater prices, weakening gross sales, competitors from Chinese language EV makers and a slower-than-expected transfer away from petrol and diesel autos.
Individually, Rivian has taken steps to chop prices amid softening demand for EVs.
The startup, which has but to show a revenue, has been renegotiating contracts with suppliers and making its manufacturing processes extra environment friendly.
