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Volkswagen Shares Decline Following $5 Billion Rivian Deal

Volkswagen (ETR:VOWG_p), Europe’s largest carmaker, saw its shares drop by 1.4% during early trading on Wednesday after announcing a planned investment of up to $5 billion in a joint venture with electric vehicle manufacturer Rivian (NASDAQ:RIVN).

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The partnership, unveiled on Tuesday, underscores Rivian’s strong asset value in software—a domain where Volkswagen has notably lagged behind, exacerbated by setbacks and losses at its software subsidiary, Cariad.

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Despite the strategic potential of the deal, concerns over its financial implications weigh heavily among investors. Volkswagen’s capital expenditure and research and development costs have stubbornly remained high at approximately 13% since 2018, according to analysis from Bernstein.

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While the transaction could be strategically justified… investors are likely to prefer VW focusing on asset sales rather than acquisitions,” noted a Wednesday report from Stifel Research.

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