“Let us help each other, the burden of misfortunes will be lighter…” The famous fable of Jean-Pierre Claris de Florian about the blind and the paralytic is a message of humanity for all the cripples of the world. In the field of electric cars, there is no shortage of people in trouble at the moment. The latest, Rivian, the American start-up which produces electric SUVs and pick-ups.
Created in 2009, supported ten years later by Ford and Amazon, who became shareholders, the company made a sensational debut on the stock market in 2021. It is now on the verge of filing for bankruptcy, paralyzed by expenses which are exploding in the face of sales which are flinch. In the first quarter of 2024, it lost 1.4 billion dollars (1.31 billion euros), which is more than its turnover over the same period.
She has just crossed paths with a giant of colossal strength but who no longer knows where to go, as if blind to the change in the world. Volkswagen’s shift towards electric automobiles is a disaster despite the billions committed. Its subsidiary Cariad, founded in 2020 and with five thousand software engineers, is accumulating bugs and delays in the definition of its software platform. Bosses come one after the other and ultimately nearly two thousand jobs should be eliminated.
A 50-50 joint company
Then the blind man loads the paralytic on his back. The German will invest this year 1 billion dollars in the capital of Rivian, create a 50-50 joint company from which it will purchase 2 billion dollars worth of services and promises within two years to commit another two billion in the parent company. In total, the German company is committing 5 billion dollars to the American start-up. A significant part of its investment plan of more than $100 billion in electricity by 2027.
The windfall is unexpected for Rivian which saw itself following the path of its competitor Fisker, which went bankrupt on Tuesday June 18, in an American market which is converting more slowly than expected to electric cars. The firm will be able to relaunch its factory project in Georgia and try to make its production profitable while it still loses $38,000 per car, even though it sells for more than $70,000 each.
Volkswagen, for its part, will be able to immediately use Rivian’s software architecture in its vehicles. It is also opening up a high-end market in the United States. But this only solves part of the German manufacturer’s problems. To resist the Chinese offensive in Europe, it must also find a way to produce cheaper cars. It will be a long way before he regains his sight.