2024-07-02 20:21:56
Volkswagen is getting help: Along with Rivian, the manufacturing of electrical automobiles is to be pushed ahead. On this manner, the Wolfsburg-based firm needs to unravel a significant downside.
Negotiations have been happening for months, as insiders report. Final Tuesday, the shock was excellent: Volkswagen has signed a cope with the US electrical automotive start-up Rivian. The Wolfsburg-based firm is investing 5 billion US {dollars} in a joint software program firm.
Earlier than the deal, each corporations had maintained strict secrecy. The truth that this was profitable even surprises Rivian CEO Robert “RJ” Scaringe. “I feel it is an achievement in itself that nothing has leaked out, contemplating how a lot work has already been carried out and the way many individuals on our groups are concerned in it,” he advised the Reuters information company.
However what makes the merger so extraordinary?
The explanation lies in Volkswagen’s previous: for years, VW had issues with its software program subsidiary Cariad. That ought to now be over. Cariad was a venture by former VW boss Herbert Diess with the bold objective of not solely supplying the corporate itself with software program, but in addition supplying different automotive producers sooner or later.
As a substitute, there have been repeated studies of delays. To forestall the software program from being delayed for automobiles from 2028 onwards, the present VW boss Oliver Blume has seemed for a brand new associate – and has now discovered one.
Rivian, which is taken into account a Tesla competitor, was based in 2009. Its headquarters are in Plymouth, Michigan. The corporate grew to become identified to a wider public in 2021 by way of a record-breaking IPO. Though the corporate had solely delivered round 100 automobiles on the time, the IPO raised $11.9 billion in capital. Rivian now gives two electrical automotive fashions, an SUV and a pickup truck, and has developed an electrical supply van for Amazon.
A financially sturdy associate ought to nonetheless give us a sigh of aid, as a result of the manufacturing prices of the automobiles considerably exceed the gross sales costs: Though a Rivian car value round $80,000 final 12 months, the corporate made a lack of round $30,000.
In different phrases, the corporate delivered virtually 13,600 electrical automobiles final quarter. Rivian generated gross sales of $1.2 billion, but in addition a lack of $1.45 billion. General, the corporate has not but made a revenue.
Volkswagen is bringing the cash and offering value benefits for the partnership. In return, Rivian is contributing its patent rights to the software program, which can be used for each Rivian automobiles and Volkswagen fashions. “Relating to a significant technical change, we won’t do every part on our personal,” stated VW boss Blume in an interview with the Monetary Instances.
“It must be a win-win state of affairs,” says Blume. “Our motivation is to speed up the software program transformation at Volkswagen throughout all of our manufacturers. Rivian has the very best structure in its class. Volkswagen has the scale.”
The deliberate collaboration consists of two key elements: firstly, the deliberate three way partnership, during which Volkswagen and Rivian will every maintain a 50 p.c share. VW is now investing as much as two billion {dollars} within the venture, half of which on the finish of 2024 and the remainder in 2026. This includes direct investments and loans.
The opposite is a direct funding by Volkswagen in Rivian price as much as three billion {dollars} in a number of steps. Primarily based on the present market worth, VW would finally have a 25 p.c stake in Rivian, making it the most important shareholder forward of Amazon. That is additionally an vital issue for VW, as a result of, as Blume explains, additionally it is about sharpening the concentrate on the American automotive market.