#VolkswagenInvestment #ElectricVehicles #Rivian
Volkswagen Invests $1 Billion in Rivian to Strengthen Electric Vehicle Presence
In a significant move to bolster its electric vehicle (EV) offerings, Volkswagen has taken a $1 billion stake in Rivian, a California-based EV startup. This strategic partnership, announced after markets closed on Tuesday, marks a crucial step for both companies as they navigate the rapidly evolving EV landscape.
Following in the footsteps of Ford Motor, Volkswagen becomes the second traditional car manufacturer to acquire a stake in Rivian. Ford, which initially held about 12% of Rivian, divested most of its shares in 2023 after retracting plans for joint EV development. Amazon remains a prominent stakeholder in Rivian, which went public in 2021.
Rivian has faced intense scrutiny from investors due to its high cash burn and substantial losses. In the first quarter of this year, the company incurred a $1.45 billion loss as it revamped its Illinois facility to introduce updated models of its R1 pickup and RS SUV electric. To mitigate these losses, Rivian has been aggressively cutting costs by optimizing operations, reducing staff, and halting the construction of a new factory in Georgia. These measures are expected to save over $2.25 billion in capital expenditure.
As of March, Rivian had $7.86 billion in cash, equivalents, and short-term investments, with a total liquidity exceeding $9 billion. This investment from Volkswagen will significantly enhance Rivian's financial position and provide a much-needed boost to its operations.
Original Article: https://www.cnbc.com/2024/06/25/volkswagen-rivian-stake.html
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