VW plans to invest $5 billion into Tesla’s rival Rivian.
The German car giant - who are known for models like the Beetle and Golf - is working on a multibillion-dollar deal that will see the classic car company use the electric car tech used in the supercar brand that tries to compete with Elon Musk's similar venture.
The deal will see VW put $1 billion into the electric truck and SUV developer and then inject an additional $4 billion in the next two years.
After being established in 2009, Rivian is yet to have a quarterly profit. For example, in the first three months of this year, it reported a loss of $1.4 billion.
Following the news, Rivian’s share price went up by 50 per cent.
VW is no exception to this fear as they have been hit with not only competition from Tesla but from China-based BYD as the wider industry attempts to move away from fossil fueled cars.
Many EV brands have struggled to move into cleaner product lines.
The development comes as competition is getting hotter between EV makers and Western countries to put tariffs on vehicles imported from China.
The European Union has announced plans to increase tariffs on Chinese products by up to 38 per cent. Talks between the two bodies are ongoing and expected to end on July 4.
Lin Jian, China’s foreign spokesperson, called the move “a typical case of protectionism” and warned the move would damage "China-EU economic and trade co-operation and the stability of the global automobile production and supply chain".
The German Transport Minister, Volker Wissing, commented that the taxes - which would come in November - threatened a “trade war”.
He wrote on X: "The European Commission's punitive tariffs hit German companies and their top products.”
