Volkswagen to Invest Billions in Tesla Rival

German car making giant Volkswagen, VW, says it will invest up to US $5 billion in Tesla rival Rivian.

The deal creates a joint venture that will allow VW and the US-based electric vehicle, EV, maker to share technology.

Rivian shares jumped by almost 50 per cent after the announcement.

The tie-up comes as competition intensifies between EV makers and Western countries move to impose tariffs on Chinese imports.

Under the agreement, VW said it will initially invest US $1 billion in the electric truck and SUV maker, with another US $4 billion to be put into the company by 2026.

Founded in 2009, Rivian has not yet posted a quarterly profit. In the first three months of 2024 the company saw a net loss of more than US $1.4 billion.

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.