Volkswagen is planning to invest $5 billion in electric vehicle manufacturer Rivian, a move that seems to have taken the market by surprise. Rivian, a company in need of capital due to its high cash burn and low production volumes, is in a situation where it is not able to achieve cash flow profitability any time soon. Volkswagen's investment therefore offers Rivian significant financial support, but also access to Volkswagen's production and engineering expertise, as well as a parts catalogue for non-electric vehicle components, which could significantly reduce their costs.

Although the precise details of the industrial logic of this investment are not yet known, it is conceivable that the two companies could benefit from synergies in joint manufacturing and engineering, thereby reducing costs and speeding up the time-to-market for new vehicles.

Volkswagen, known for its strategy of acquiring and collaborating with other brands including Audi, Bentley and Lamborghini, does not intend to buy Rivian but plans to provide initial funding of $1 billion, paving the way for additional contributions of $4 billion.

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