VW will invest up to $5B into Rivian to form joint venture for next-gen EVs
VW and Rivian have just announced that the two companies will form a joint venture, bringing Rivian’s software expertise to VW’s products and providing an initial $1 billion, and potentially up to an eventual $5 billion, in capital for Rivian to get through its push to deliver its upcoming R2 vehicle.
Rivian is currently working hard to get costs down in its quest for profitability. While the company has large cash reserves, it’s running through them at relatively rapid rate. The financials get a little bit better each quarter, but there is still a lot of work to be done.
Recently, Rivian announced that it would delay building its plant in Georgia in order to save over $2 billion in the short term, helping reduce pressure on its near-term financials.
Now, today, the company has had another pressure valve released, as VW and Rivian have announced they will form a joint venture to bring Rivian’s software to VW’s EVs, with VW offering an initial $1 billion in capital and potentially up to $5 billion by 2026.
“Our customers benefit from the targeted partnership with Rivian to create a leading technology architecture. Through our cooperation, we will bring the best solutions to our vehicles faster and at lower cost. We are also acting in the best interest of our strong brands, which will inspire with their iconic products. The partnership fits seamlessly with our existing software strategy, our products, and partnerships. We are strengthening our technology profile and our competitiveness.”
Oliver Blume, CEO of Volkswagen Group
The partnership is valuable for VW as well, as software has been its biggest issue recently. VW’s previous CEO, Herbert Diess, stepped down in 2022, and it’s thought that software issues were the main reason for his departure. In 2023, VW hired a former Rivian exec to help with software. It must have liked what it got, as the companies are deepening their relationship now.
The partnership begins with VW offering a $1 billion convertible note to Rivian, which will convert into an equity holding around the end of this year.
In addition, the two companies will establish a 50/50 joint venture around “next generation electrical/electronic architecture.” This will give VW immediate access to Rivian’s software architecture, which has been seen as one of the major strengths of the company.
“We’re very excited to be partnering with Volkswagen Group. Since the earliest days of Rivian, we have been focused on developing highly differentiated technology, and it’s exciting that one of the world’s largest and most respected automotive companies has recognized this. Not only is this partnership expected to bring our software and associated zonal architecture to an even broader market through Volkswagen Group’s global reach, but this partnership also is expected to help secure our capital needs for substantial growth. Rivian was created to help the world to transition away from fossil fuels through compelling products and services, and this partnership is beautifully aligned with that mission.”
RJ Scaringe, Founder and CEO of Rivian
After the establishment of this joint venture, VW says it will invest an additional $4 billion into Rivian, in $1 billion tranches in 2025 and 2026, contingent on Rivian meeting “certain milestones.”
After the announcement, RIVN stock is trading up more than 40% in after hours trading. It had already risen 8% during today’s trading session after an analyst upgrade. Rivian will hold an investor call at 3pm Pacific, 6pm eastern here.
Electrek’s Take
This is great news for Rivian, and great news for VW as well.
However, Rivian has had a number of past partnerships that didn’t turn out.
Rivian had previously partnered with Ford to build Ford/Lincoln EVs and also with Mercedes to build electric vans. Both of those fell through, with the Mercedes deal including a joint venture and the Ford deal including a big investment which Ford later trimmed.
Rivian has also partnered with Amazon to deliver 100,000 delivery vans. That partnership is going well with over 10,000 vehicles delivered, but the exclusivity portion of the contract recently ran out, and now Rivian is looking for more purchasers.
In this case, though, I can see a direct reason for Voltswagen to need Rivian’s help. While their software is a lot better now than it used to be, software has been the achilles heel of traditional auto companies in general, and VW specifically. And with VW’s yearly revenue ($335 billion in 2023), they can spare a little change to fix one of their major problems.
One other interesting note: VW recently spun off its classic Scout brand into a Rivian-like adventure EV. That was seen as an attempt to compete in a market that Rivian is currently the best offering in. We wonder if this partnership will include using Rivian’s expertise for the Scout? Stay tuned.
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Just after Tesla launched its ‘Full Self-Driving’ package, in China, the country announced that it cracking down on automated driving features with new limitations.
In February, Tesla launched a first version of its “Full Self-Driving” FSD package in China for owners with the latest “Hardware 4.0”, or “HW4”, vehicles.
Most of the features under Tesla’s FSD package have been limited to North America due to Tesla training its system for this market first and due to regulatory limitations in other markets.
Shortly after Tesla launched FSD in China, the American automaker had to pause its rollout due to updated requirements from China’s Ministry of Industry and Information Technology (MIIT).
Now, MIIT has confirmed that it held a meeting with automotive industry stakeholders yesterday, and it has further clarified the rollout of advanced driver assistance (ADAS) features.
CNEV reported on the meeting:
Car companies were asked to refrain from using words like “self-driving,” “autonomous driving,” “smart driving,” “advanced smart driving,” and instead use the term “combined assisted driving” to avoid misleading consumers, according to the minutes of the meeting.
Tesla had already changed the name from ‘Full Self-Driving’ to “Intelligent Assisted Driving” following the launch in China.
Based on a statement from MIIT, the meeting focused on enforcing the previously announced updated requirements that launched right after Tesla introduced FSD in China (translated from Chinese):
The meeting emphasized that automobile manufacturers must deeply understand the requirements of the “Notice”, fully carry out combined driving assistance testing and verification, clarify the system functional boundaries and safety response measures, and must not make exaggerations or false propaganda. They must strictly fulfill their obligation to inform, and truly assume the main responsibility for production consistency and quality safety, and truly improve the safety level of intelligent connected vehicle products.
Regulators want automakers to reduce the frequency of new software updates and instead focus on extended testing before releasing new updates.
The last few months have been quite chaotic for ADAS systems in China. Along with Tesla’s FSD release, several Chinese companies released their systems, including BYD, Xiaomi, and Huawei.
Xiaomi reported a fatal accident in which its ADAS system was active just seconds before the crash, and Tesla owners using FSD racked up thousands of dollars in fines due to FSD making mistakes.
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The Global Payments Company logo seen displayed on a smartphone.
Igor Golovniov | LightRocket | Getty Images
Global Payments shares tumbled 17% on Thursday after the company said it’s buying Worldpay for more than $24 billion while simultaneously selling its Issuer Solutions business to Fidelity National Information Services.
The company said that in acquiring Worldpay, which FIS had purchased in 2019 before later selling a majority stake, it’s expanding its reach and will be able to serve over 6 million customers across more than 175 countries, enabling $3.7 trillion in annual payment volume.
In selling its Issuer Solutions unit to FIS for $13.5 billion, Global Payments is divesting a unit for back-end financial processing that’s long been viewed as a stable provider of growth. In the end, Global Payments is going bigger in providing payments services to merchants, while FIS is focusing on issuer processing.
FIS bought Worldpay for about $35 billion in 2019 and sold most of its stake last year to GTCR.
Global Payments said on Thursday that it obtained committed bridge financing and plans to issue $7.7 billion of debt “to replace the bridge commitment and refinance Worldpay’s outstanding debt.”
Global Payments CEO Cameron Bready called it a “defining day,” and said the transaction gives the company “significantly expanded capabilities, extensive scale, greater market access and an enhanced financial profile.”
But Wall Street was less enthusiastic. While the acquisition gives Global Payments a larger footprint in payment processing, analysts at Mizuho described it as a strategic step backward.
Mizuho reiterated its neutral rating on the stock, warning that “the business could be seeing more meaningful margin pressure than investors acknowledge.” The analysts wrote that FIS won the trade, getting the “crown jewel” with Global Payments getting “more of the same.”
FIS shares rose more than 8% on Thursday.
Both deals are expected to close in the first half of 2026, pending regulatory approval.
The Tesla Cybertruck is in crisis. The automaker is still sitting on a ton of old inventory, which it is now heavily discounting, and it is throttling down production to try to avoid building up the inventory again.
When launching the production version of the Cybertruck in late 2023, Tesla CEO Elon Musk claimed that the vehicle program would reach 250,000 units a year in 2025:
“I think we’ll end up with roughly a quarter million Cybertrucks a year, but I don’t think we’re going to reach that output rate next year. I think we’ll probably reach it sometime in 2025.”
We are now in 2025, and Tesla is expected to currently be selling the Cybertruck at a rate of about 25,000 units a year – a tenth of what Musk predicted.
Earlier this month, we reported that Tesla began the second quarter with 2,400 Cybertrucks in inventory, valued at over $200 million.
This is a real problem for Tesla as many of those Cybertrucks are older 2024 model year units not eligible for the federal tax credit, and even some ‘Foundation Series’, which Tesla stopped building in October 2024 – meaning that Tesla is sitting on some 6-month-old trucks in some cases.
Tesla is now offering deeper discounts on the new inventory of Cybertrucks. The discounts can go as high as $10,000, but the average one is closer to $8,000, which is more than the tax credit:
Despite Tesla’s efforts, the automaker has only reduced its Cybertruck inventory by about 100 units since the beginning of the month.
Tesla is now further throttling down production of the Cybertruck at Gigafactory Texas, according to a new report from Business Insider.
According to two Tesla workers speaking with BI, the automaker has reduced its Cybertruck production teams and now operates at a fraction of its original capacity. It also moved some Cybertruck production workers to Model Y production at the plant.
One of the workers said:
“It feels a lot like they’re filtering people out. The parking lot keeps getting emptier.”
As we previously reported, Tesla has been operating all its factories at approximately 60% capacity to avoid building up excessive inventory amid lower demand.
When it comes to the Cybertruck program, it sounds like Tesla is lowering production even further.
Last week, Tesla launched a new version of the Cybertruck in an attempt to boost demand, but it has been poorly received due to the automaker’s removal of many essential features.
Electrek’s Take
There are a lot of other automakers that would have already given up on the Cybertruck ith these results, but not Tesla. Musk is not one to admit defeat easily.
However, Tesla is running out of options.
The new Cybertruck RWD was a desperate attempt, and I doubt it will work. Now, it sounds like Tesla is further throttling down production – virtually confirming that the new trim didn’t help.
The next step would be a complete production pause.
Again, I don’t think Musk wants to admit defeat, but at some point, it’s inevitable.
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