Volkswagen, a German car manufacturer, has announced plans to invest five billion dollars in the electric car industry. Of this amount, three billion will be invested directly in the company and two billion will be used for a joint development project. The collaboration is between Volkswagen and American electric car manufacturer Rivian, with a focus on software-based electric cars.
Rivian’s software technology will be a key component in the development process, with the goal of reducing costs per car. Volkswagen is looking to leverage Rivian’s software expertise to accelerate the development of software-based cars. By partnering with Rivian, Volkswagen hopes to strengthen its position in the competitive electric car market.
Volkswagen’s own Cariad unit, responsible for software development, has faced challenges in launching new products in a timely manner, according to financial media reports. By partnering with Rivian, Volkswagen hopes to overcome these challenges and improve its position in the market.
For Rivian, the partnership with Volkswagen is seen as a much-needed validation of its financial status. The investment will help address the company’s capital needs for growth and expand its software technology to a wider market. Following the announcement of the partnership, Rivian’s stock price surged over 30% in after-hours trading.
