Rivian Soars on Volkswagen's $5 Billion Investment

So let's start with the basics. Stephanie, your reaction to this deal? Well, Ed, I think what you you hit it when you said this was an unexpected announcement and it's making waves to the industry and I think it's huge. It's a breakthrough moment for Rivian. As you know, we've been following Rivian also and although they've made some really good progress in the market with their products, with their customer experience, you know being having profitable has been a big issue. And so this investment is huge. It's going to help them really become on get on that road to profitability, especially as they're trying to launch the R2, which is very critical vehicle for them in terms of affordability in the marketplace and kind of in that segment where there's more volume. So I think this is a huge moment and I think for VW as well, right being having access to that cutting edge technology and I think the opportunities for global expansion for both companies is really on a really going to be a positive for both. When the news broke last night, I took a few phone calls and what was so interesting is very quickly a few folks close to Rivian at Rivian and elsewhere in the industry would point out to me Volkswagens software strategy has not gone that well. They kind of formed Cariad the unit and the Cariad platform. I'm told they face some major issues. How much do you think this is sort of Volkswagen reacting to that versus actually pretty much an acknowledgement that that Rivian is good at software? Yeah, I think it's, I think it's Volkswagen's, you know, acknowledging that Rivian has its cutting edge technology and it's going to really help them to scale. And I even think about broader, like if you think about the Chinese automakers and just kind of what the penetration that they've had and the technology that they've had. So I think this is going to really help VW not only in the North American market, but globally as well. So I think they really saw that this is something that's really going to help their brand and really scale, help them scale faster and more efficiently. I have to be honest with you, Stephanie, Rivian's track record in joint ventures is not good. You know, I've been covering this company since the moment that RJ was on stage at the LA Auto Show and revealed to the world that he had to pick up an SUV and within, you know, three or four years after that, the Ford JV had been and gone. Ford invested 500 million in Rivian and then they plan to build a Lincoln together, they scrapped it. They plan to build a joint venture EV together, they scrapped it. The Mercedes relationship on commercial vans lasted 3 months. How much of A caution retail is that for Volkswagen? No, I definitely think they need to be cautious, especially in these two distinct companies, right? And they need to constantly make sure that their strategic goals are aligned. So I think to your point, it's going to be, you know, it's going to be a long bumpy Rd. but I think they're going to have to be very focused on making sure they're aligned and kind of what you just mentioned about some of the failures in the past. So I think it's definitely something a risk, right, that they need to closely follow and make sure that they're aligned. You and I spoke very recently about market share. So Rivian is going to come to market in 2026 with the R2, and that probably will be a competitor for existing models like the Model Y. But at the same time, Tesla is seeding some market share in North America and other markets as more models join the market. How are you tracking that and how do you see that going? Yeah, I definitely see like it all about product, right customers like new product and with Rivia and having the R2R3 adding more vehicles into the marketplace, I think that's going to really in terms of like Tesla not having anything other than recently the cyber truck and no definitive timeline for the more affordable vehicle. I think Tesla definitely has more and more competition and not only with Rivia and VW, but other makes as well. So I definitely think Tesla is really going to need to get some product into the market to maintain that share that they've had for the many, many years. I've got a stat for you. For the 12 months through May, Tesla sold 618,000 electric vehicles in the United States. All of the other manufacturers combined sold a Bev 597,000. So at some point I think we expect that to cross, right. But the, the the question it raises is one that RJ Scarringe has argued with me about over many years. He says that this isn't an issue of interest rates or necessarily or tepid consumer appetite towards Ev's generally. He argues we need more models. The more models we have on the market, the better the market will be. Do you share that thesis? Yeah, I think we need more models, but more affordable markets, right? If we want mass adoption, we need to have more affordable models. Price is the top barrier for consumer adoption. And so as we have more and more affordable markets or models in the marketplace, that's going to help with adoption. So I think I agree with that, more models, but more affordable models is going to be critical. Cast your eye to the future. What happens with Rivi and Stephanie? I, I'm betting on them. I think they have a lot of good brand equity in the marketplace. I think the VW partnership is really a lot of great potential and I think their collaboration can really evolve this whole connected software defined vehicle technology. And so I think I think it's promising. But like you just mentioned, I think they just need to be careful that their strategic goals are aligned and they're in lockstep.