Volkswagen will invest up to $5 billion (£3.9 billion) in the US electric car maker Rivian as manufacturers reassess their strategies amidst uncertain demand.
The German automaker announced an initial investment of $1 billion in the electric truck maker as part of a joint venture, granting it access to Rivian’s technology.
An additional $4 billion will be invested in the Tesla competitor by 2026. Following the news, Rivian’s shares surged by 50% in premarket trading in the US.
This marks the second unexpected boost for the US carmaker in just over a month after the Biden administration imposed tariffs on Chinese electric vehicles, citing unfair advantages from state subsidies.
These developments come as the electric vehicle sector faces challenges from weakening demand and a trade war, with the European Union also planning to impose tariffs on Chinese vehicles.
The German automotive industry has opposed the EU’s plan due to concerns that China might retaliate with counter-tariffs, potentially impacting manufacturers like BMW and Daimler.
