In the midst of a historic crisis, Volkswagen has made a risky decision: put $6 billion into Rivian

“Can we be sure that this will not be the next way to bury a billion euros?”

That is, according to Bloombergthe question that Daniela Cavallo, president of the Works Committee, has asked after learning that Volkswagen’s investment in Rivian will not remain at the initial 5,000 million dollars. The company will increase this expense by another $800 million.

The moment is especially delicate. The company already announced a few months ago that it was launching a savings plan of 10,000 million euros. The consequences, of course, have been felt by the workers. Audi is determined to close its Brussels plant and Volkswagen has put on the table the closure of three more plants in Germany.

In addition to the dismissal of a workforce that in Germany totals 120,000 employees, Volkswagen has also confirmed that it raises reduce soil of its workers 10%. The elimination of Porsches as a company vehicle for managers almost sounds like a joke.

And in the midst of this storm, Volkswagen will increase its bet on Rivian, adding another almost 1 billion to a company that has lost more than 90% of its value in the last three years.

A very risky bet

To understand the concern of Volkswagen workers regarding the company’s investment in Rivian, we have to look back three years. In 2021, Rivian was one of the great hopes for the electric car and was valued at $150 billion. There was a curious relationship: without income, Riviaan became the third most valued car manufacturer on the stock market in the world.

Rivian’s great value so far has been its software. Like so many other companies, it has encountered a problem when it wanted to launch its production line but its digital pillar has so much weight and is so promising that it has come to be associated with the supposed Apple car.

However, the company has had to dispense with 10% of your staff to stay alive, despite present more and more models looking to the future. Of course, the stagnation in electric car sales and Donald Trump’s threats to withdraw aid for the purchase of electric cars They do not seem to present a very rosy scenario.

But what Volkswagen really wants to buy with this move is all of Rivian’s knowledge of software. The company has been immersed in chaos that has slowed the market launch of models like the Electric Porsche Macan or the Audi Q6 e-tron. Cariadwho should have been the drivers of this part of the company, is facing thousands of layoffs.

It is known that the joint company that Volkswagen has created with Rivian will employ a thousand people and that most of them will come from the American company. Furthermore, as we already anticipated with Apple’s supposed interest, it is a lifeline for Rivian that can move forward with the launch in 2026 of its R2, an SUV that It should reach the market for $45,000.

At the same time, Volkswagen gains Rivian’s software know-how, which should help it not repeat some of the big mistakes they’ve made in recent years. But, above all, they gain agility and the possibility of launching new compact SUVs at a lower cost, they point out in Reuters.

Furthermore, we must not lose sight of the fact that Donald Trump has already threatened to raise tariffs to cars that are not manufactured in their country. This would seriously affect the European vehicles and, together with Rivian, Volkswagen can continue launching vehicles on the market while avoiding this extra cost.

However, we must not lose sight of the fact that the support and expectations that had been placed on Rivian are now much lower than three years ago. It was then considered the new Tesla but in that time it has lost most of its value. Obviously, this has facilitated Volkswagen’s entry into the company but calls into question how much it can really benefit from it.

Photo | rivian

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