With the advent of EVs, many new automotive companies were created to capture market share in the highly competitive and innovative industry. However, many of these new companies failed, such as Fisker and Lordstown Motors. Among the new companies, there have only been a handful of successes like Tesla and BYD. Between the failures and successes lie a similarly smaller number of companies that are still struggling to achieve profitability and growth in the face of fierce competition from new and established players. One of these struggling companies is Rivian.
Rivian, an EV startup founded in 2009, has been one of those struggling EV companies, losing tens of thousands per EV it sells and having lost $5.4 billion in 2023 and $6.8 billion in 2022. However, it has been given a recent lifeline as it announced a partnership with Volkswagen where Volkswagen will invest $1 billion initially and invest up to $5 billion by 2026, giving Rivian more time to cut costs and become cash flow positive.
The partnership will also entail Volkswagen using Rivian’s electrical architecture and software, which will likely materialize in the second half of this decade in brands like Audi and Porsche.
This partnership is in a similar vein to Stellantis’s investment in the Chinese automaker Leap Motor, which gives Stellantis access to EV technology. In a time of increased EV competitiveness and importance, partnerships like Volkswagen’s may become more common as legacy automakers try to integrate innovative companies’ technologies and software into v their own.