Irvine-based Rivian Automotive acquired a significant monetary enhance Tuesday when Volkswagen agreed to speculate as much as $5 billion in a three way partnership with the struggling electrical truck maker.
Under a partnership introduced by the businesses, the German automaker will initially present $1 billion and as much as $4 billion extra over time.
This integration will enable VW to leverage the corporate’s expertise to develop “subsequent technology” battery-powered autos and software program.
The shock funding comes at a troublesome time for the electrical car market, which has created monetary difficulties for Rivian and different EV makers.
With their modern designs, Rivian vehicles and sport utility autos initially attracted quite a lot of curiosity from buyers, fueling a vastly profitable preliminary public providing of inventory in 2021; the corporate closed its first day of buying and selling valued at almost $88 billion. Amazon.com is Rivian’s largest shareholder.
But analysts say some automobile patrons have been delay by the excessive price ticket of Rivian’s newest car choices: The firm’s R1T electrical pickup begins at almost $70,000, whereas the R1S SUV begins at almost $75,000.
Rivian reported a internet lack of $1.52 billion for the quarter ended Dec. 31, in comparison with $1.72 billion in the identical interval a 12 months earlier.
Signs of stress elevated. In March, Rivian plans postponed construct a brand new $5 billion manufacturing plant in Georgia to save cash on big losses.
A month earlier, Rivian had introduced a ten% reduce in its workforce and lowered manufacturing expectations.
Last week, one other native electrical car maker, Manhattan Beach-based Fisker Group Inc., filed for Chapter 11 chapter safety after failing to safe financing from undisclosed automakers.
Earlier this 12 months, Apple scrapped its self-driving electrical car program, after reportedly spending $10 billion over a decade.
And Lucid Motors, a luxurious electrical car maker primarily based within the Bay Area metropolis of Newark, obtained a $1 billion injection final month from an organization affiliated with Saudi Arabia’s sovereign wealth fund, the type of massive backer Fisker didn’t have.
Rivian shares, which took a beating earlier this 12 months, jumped 30% in prolonged buying and selling Tuesday. Shares closed at $11.96.
Tesla Inc., the trade’s greatest participant, has additionally been hit by weak gross sales and falling earnings. In April, the corporate stated it might lay off greater than 10% of its workforce.
