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Volkswagen is putting $5 billion into Rivian, a company that makes electric vehicles. This is to help Volkswagen catch up in making electric cars.
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The $5 billion investment will be spread out over the next few years, starting with $1 billion now.
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After the news, Rivian's stock went up by 42% before the market opened. Volkswagen's stock in Europe went down by 2.6%.
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Volkswagen is behind in electric cars and self-driving technology. Rivian is strong in both areas, so this investment will help Volkswagen improve.
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By investing in Rivian, Volkswagen hopes to get better at making electric cars and developing the software for them.
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This year, Volkswagen is expected to have only 8% of the market for battery-powered electric vehicles. BYD is expected to have 15%, and Tesla up to 16%.
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Volkswagen's delivery of all-electric vehicles dropped by 3.3% in the first three months of 2024 because of market issues and a lack of parts. They delivered 136,436 electric cars in this time.
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Expert Cyrus Mewawalla thinks it will take several years for Volkswagen to see benefits from this investment and for it to improve their profits.
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This investment is seen as a move for Volkswagen to catch up with other companies in the electric vehicle industry.
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Volkswagen has not given any more information about the deal.