VW launches $5.8bn tie-up with Tesla rival Rivian

Volkswagen Group (VW) and Tesla rival Rivian person launched a associated venture, with the German car elephantine expanding its concern successful the partnership.

The 2 companies accidental the the woody is present worthy $5.8bn (£4.55bn) - up from an archetypal pledge of $5bn by VW.

Shares successful the US electrical conveyance (EV) shaper jumped much than 9% successful after-hours trading pursuing the announcement.

The tie-up volition spot the firms sharing captious exertion astatine a clip of slowing planetary request for electrical cars and accrued contention from Chinese rivals.

The associated task provides loss-making Rivian with a important root of backing arsenic it prepares for the motorboat adjacent twelvemonth of its R2 exemplary - a sports inferior conveyance (SUV) that is smaller and much affordable than its existent offerings.

It besides means VW volition beryllium capable to usage Rivian's exertion successful its ain scope of vehicles.

The archetypal VW models equipped with Rivian exertion are expected to beryllium disposable to customers arsenic aboriginal arsenic 2027.

"By combining their complementary expertise, the 2 companies program to trim improvement costs and standard caller technologies much quickly," the 2 companies said successful a statement.

Under the plan, developers and bundle engineers from some firms volition initially enactment broadside by broadside successful California, portion 3 different facilities successful North America and Europe volition beryllium acceptable up.