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German car making giant Volkswagen (VW) says it will invest up to $5bn (\u00a33.94bn) in Tesla rival Rivian.<\/p>\n
The deal creates a joint venture that will allow VW and the US-based electric vehicle (EV) maker to share technology.<\/p>\n
Rivian shares jumped by almost 50% after the announcement.<\/p>\n
The tie-up comes as competition intensifies between EV makers and Western countries move to impose tariffs on Chinese imports.<\/p>\n
Under the agreement, VW said it will initially invest $1bn in the electric truck and SUV maker, with another $4bn to be put into the company by 2026.<\/p>\n
Founded in 2009, Rivian has not yet posted a quarterly profit. In the first three months of 2024 the company lost $1.5bn.<\/p>\n
VW, like other motor industry giants, has come under pressure from rivals like Tesla and China’s BYD as it tries to make the shift from fossil fuel-powered vehicles.<\/p>\n
Meanwhile, some EV start-ups have struggled to make headway in the highly competitive market and as higher interest rates hit demand for big ticket purchases.<\/p>\n
The partnership will give VW immediate access to Rivian’s software allowing the German car maker to use it in its cars. <\/p>\n
Motor industry giants like VW have also been facing growing competition from Chinese EV makers, which have been expanding globally.<\/p>\n
Earlier this month, the European Union (EU) warned that it will raise tariffs on Chinese EV imports by as much as 38%<\/a>.<\/p>\n