Toronto, Ontario – This weekly Tuesday Ticker covers Volkswagen’s recent partnership with Rivian and its impact on the latter’s stock. Meanwhile reports claim Chinese-made cars will claim 33 percent of the global market share by 2030.
Volkswagen throws a vine
Last week, Volkswagen and the electric vehicle startup Rivian announced a new joint venture partnership. As part of this agreement, Volkswagen will initially invest $1 billion in Rivian. There is also potential for Volkswagen’s total investment in Rivian to grow to up to $4 billion over time.
Through the deal, Volkswagen will gain access to Rivian’s technology for use in VW electric vehicles. The automakers will also partner to develop “next generation” EVs and related software.
“The partnership is anticipated to accelerate the development of software for Rivian and Volkswagen Group,” reads a press release from the companies. “It is expected to allow both companies to combine their complementary strengths and lower cost per vehicle by increasing scale and speeding up innovation globally.”
The unexpected news was particularly of interest given the current EV climate, where other OEMs—like Ford and General Motors—are cutting back on EV expenditures.
Rivian shares rose nearly 50 percent immediately following the news, reaching a peak of US$18.43 per share.
As of Tuesday at 2 p.m. ET, shares of Rivian traded at US$13.42 per share, up 28.79 percent over the last month, but down 36.37 percent year-to-date.
Global giants
A new report suggests that Chinese-made cars will account for one-third of the global vehicle market by 2030.
Global consulting firm AlixPartners, which published the report, said “China is the industry’s new disruptor, capable of creating must-have vehicles that are faster to market, cheaper to buy, advanced on tech and design and more efficient to build.”
The firm claims nine million Chinese vehicles will be sold outside of China by 2030, despite recent discussions of tariffs on Chinese-made cars, uttered by the European Union, United States and Canada. A 30-day consultation process among federal Canadian government officials will commence on July 2.
“Automakers expecting to continue operating under business-as-usual principles are in for more than just a rude awakening—they are headed for obsolescence,” said Andrew Bergbaum, AlixParters global co-leader of automotive and industrial practice.
“The revolution taking place in the global auto industry is driven by the incredible and once unthinkable maturation of Chinese automakers that do a number of things differently.”
