Rivian and VW Try to Save Each Other

By Douglas A. McIntyre Published Nov 13, 6:20AM EST

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Rivian and VW Try to Save Each Other — © Pattanaphong Khuankaew / Getty Images

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Volkswagen and Rivian Automotive Inc. (NASDAQ: RIVN | RIVN Price Prediction) have created a joint venture to help save both.
This comes at a time when electric vehicle sales have slumped.
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Volkswagen, staggered by its lack of success in the electric vehicle (EV) market, and Rivian Automotive Inc. (NASDAQ: RIVN), a small EV company fighting for survival, have created a joint venture to help save both.

VW, which plans to close three plants in its home market in Germany due to slow sales, will invest $5.8 billion in Rivian. The world’s second-largest car maker will have access to Rivian’s technology. In addition, the two companies hope to launch the R2, a Rivian SUV, in 2026. The total investment will include the $1 billion VW has already invested. The money will go into Rivian and a joint venture called the Rivian and VW Group Technology LLC.

“This partnership and this deal secures the capital for us to ensure that we can’t only take Rivian through the launch of R2 at Normal, but secures the launch of and growth of R2 in our Georgia facility and through (to being) cash flow positive for us as a business,” Rivian CEO R.J. Scaringe said. Whether the JV will work is another matter. That is because EV sales in the United States and the European Union are under siege as people stay with gasoline-powered vehicles.

Rivian recently said it would produce between 47,000 and 49,000 vehicles this year, below its previous plan. It blamed part of its supply chain. In the most recent quarter, Rivian had revenue of $874 million and a net loss of $1.1 billion.

EV growth in the U.S. market has slowed. In some parts of Europe, sales are actually falling, including a large dip in Germany throughout the year. Consumers worry about the range of EVs, the length it takes to charge them, low charging levels in cold weather, and high tire wear rates. A joint venture will not change that.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.