A Volkswagen ID.4 electric vehicle (EV) is charged at a Rivian charging station in San Francisco, California, on Tuesday, June 25, 2024.
David Paul Morris | David Paul Morris Bloomberg | Getty Images
electric truck manufacturer Rivian $5 billion deal Volkswagen Group Bringing some much-needed cash to Rivian. But it also opens up a path to the future for Volkswagen in a car industry that has always been self-made.
In its short life, Rivian has received rave reviews from the automotive press, earned top-notch customer satisfaction ratings, and experienced one of the largest initial public offerings in history, and saw its market capitalization soar to $150 billion.
But Rivian’s stock price has since plummeted. As of the second quarter, Rivian was losing about $1.5 billion per quarter, or about $30,000 to $43,000 per truck sold over the past five quarters.
“They might be one or two projects [new models] Stay away from bankruptcy.
With prices typically starting around $70,000, Rivian trucks aren’t cheap.
Financial pressures and instability in the electric vehicle market and the overall economy have led to multiple rounds of layoffs at Rivian. In March, the automaker announced it would halt construction of a $5 billion plant in Georgia that was planned to produce next-generation vehicles.
Then in late June, Volkswagen Group, the world’s second-largest automaker by sales, swooped in with plans to invest $5 billion in the cash-strapped electric car maker in 2026.
The emergency deal is expected to result in some kind of joint venture as soon as this fall.
“I think this deal ultimately has a significant impact on Rivian, Volkswagen and the industry as a whole,” said Piper Sandler senior analyst Alex Potter.
But challenges remain: Automotive history is littered with failed partnerships, Rivian and Volkswagen remain rivals, and the transition to electric vehicles is proving more volatile than many forecasters expected.
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