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Volkswagen to invest USD 5 bn in Rivian: German automaker Volkswagen (VW) is set to invest up to USD 5 bn in Abdul Latif Jameel-backed US EV startup Rivian to enhance software-defined vehicle (SDV) platforms, according to a statement. The partnership — which will be established as a 50/50 joint venture — grants VW immediate access to Rivian’s EV software for its vehicles. Both companies will use the tech from their JV to develop vehicles before 2030. Rivian’s shares surged by over 35% following the announcement, The Financial Times reports.
The details: The investment will include an initial USD 1 bn convertible loan that will turn into Rivian stock pending regulatory approval scheduled and an additional USD 4 bn committed as part of the overall investment, the statement adds. VW will also invest USD 2 bn in Rivian’s common stock in two USD 1 bn tranches during 2025 and 2026.
A lifeline for Rivian: The EV maker has been grappling with financial challenges exacerbated by higher interest rates and softening US demand for electric vehicles, sending Rivian’s shares down about 90% since it went public in 2021. (Its market cap was larger than VW’s at the time.) Rivian posted a loss of USD 1.4 bn in 1Q 2024 as it lost around USD 38k on each of its USD 70k vehicles.
What’s behind Rivian’s decline? Rivian was also among the EV makers to have missed their annual production targets or experienced record low slumps in stock last year. The company said it will lay off 10% of its workforce and expects to shut down production for several weeks in 2Q 2024 to upgrade its production line, improve efficiency, and cut costs in February.
The company is working with other major players: Rivian partnered with Amazon — one of its biggest shareholders — to unroll electric trucks for order deliveries in the Saudi market over the next seven years. They also partnered to launch 300 Rivian trucks in Munich, Berlin, and Dusseldorf over the next few years.
IN OTHER ABDUL LATIF JAMEEL NEWS-
Almar eyes investment in Chilean lithium: Abdul Latif Jameel-backed water infrastructure developer Almar Water Solutions is looking to partner with Chile’s state-backed mining company Codelco on its Maricunga lithium project, according to data seen by Attaqa. Almar aims to extract lithium to be used in car batteries by leveraging its water treatment technology. Codelco has tapped financial advisor Rothschild to select a partner for the project by next year.
The details: The company aims to initially produce 20k metric tons of lithium carbonate equivalent annually through evaporation ponds, followed by a second phase targeting 30k metric tons via direct lithium extraction. Construction is set to start in early 2027 and operations are expected to start by 2030.
Wait, how does this work? Over half of the world’s lithium is mined from rocks while the rest is extracted from distilling salt water, Attaqa explains. This happens by pumping saltwater into a series of evaporation ponds which evaporate over months and a variety of salts precipitate out, leaving a brine with an increasing concentration of lithium.
Saudi 💚 Chile’s lithium: Saudi Industry and Mineral Resources Minister Bandar Alkhorayef is set to touch down in Chile — the world’s second-largest lithium producer — next month, to look into the possibility of sourcing lithium, a key component for EV and battery storage production.
