The $5 billion investment by VW in Rivian could bring significant change to both companies and the auto industry.

Rivian, an electric truck maker, secured a $5 billion deal that will provide it with much-needed cash. However, this deal also provides Volkswagen with a path to a future in the auto industry that it has struggled to achieve on its own.

Rivian, a young automaker, has received accolades from the media, high customer satisfaction ratings, completed a massive IPO, and seen its market worth skyrocket to $150 billion in a brief period.

Since then, Rivian's shares have fallen. In the second quarter, the company was losing approximately $1.5 billion per quarter, or around $30,000 to $43,000 on every truck it sold in the past five quarters.

Joe McCabe, president and CEO of AutoForecast Solutions, stated that they could be one or two programs away from bankruptcy.

Rivian's trucks are not inexpensive, with prices typically starting at $70,000.

The automaker paused work on a $5 billion factory in Georgia due to financial strain and instability in the EV market and broader economy, resulting in multiple rounds of layoffs at Rivian.

In late June, VW Group, the world's second-largest automaker by volume, made a planned $5 billion investment in the struggling EV manufacturer through 2026.

A joint venture may be established as early as this fall due to the successful completion of the nick-of-time deal.

According to Alex Potter, senior analyst at Piper Sandler, the deal was highly significant for Rivian, Volkswagen, and the industry as a whole.

Despite the challenges, the EV transition has proven rockier than many forecasters had expected.

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