If you can't win, then buy! Volkswagen invests $5.8 billion in electric vehicle newcomer Rivian

If you can't win, buy! Volkswagen, which is mired in difficulties, is firmly grasping the electric vehicle startup Rivian. On November 12, The Wall Street Journal reported that German automotive giant Volkswagen and electric vehicle startup Rivian will collaborate to establish a joint venture focused on developing Rivian's electrical architecture and software technology stack, thereby supporting the launch of Rivian's R2 model in the first half of 2026, and is expected to support the first all-new electric vehicle model resulting from the collaboration between the Volkswagen Group and Rivian to be launched as early as 2027. Additionally, Volkswagen plans to invest up to $5.8 billion in Rivian and the joint venture before 2027. Previously, Volkswagen had already invested $1 billion in Rivian through convertible bonds. The two companies announced that the team will establish a base in Palo Alto, California, with three additional bases located in North America and Europe still under development. Wassym Bensaid from Rivian and Carsten Helbing from Volkswagen will jointly serve as co-heads of the joint venture. Volkswagen Mired in Difficulties In a challenging economic environment and with intensified competition in electric vehicles, German automotive giant Volkswagen is facing unprecedented challenges — in October, Volkswagen's labor committee warned that the company plans to close at least three factories in Germany, scale down operations at other factories, and lay off tens of thousands of employees to cut costs. Analysts believe that German automakers, including Volkswagen and Mercedes-Benz, have fallen behind Tesla and Chinese companies in the transition to electric vehicles and have lost to many innovative Chinese startups in key Asian markets. Therefore, Volkswagen needs to accelerate its investment in electric vehicles — Rivian is an important step in Volkswagen's self-rescue plan. Volkswagen CEO Oliver Blume stated: “The collaboration with Rivian is a logical choice under our software strategy.”