ESG Today reports that the 5 billion USD to be invested by Volkswagen Group will be sent in three annual tranches, starting this year. The need for a collaboration effort comes as Volkswagen aims to shift as much of its current fleet to clean fuels, as by 2030, the German car brand wants EVs to make up 70% of its total sales.

Starting 2033, Volkswagen said it will only manufacture EVs in Europe.

Oliver Blume, CEO of Volkswagen Group said that "our customers benefit from the targeted partnership with Rivian to create a leading technology architecture. Through our cooperation, we will bring the best solutions to our vehicles faster and at lower cost."

Rivian's involvement in the new joint venture will improve the manufacturing process, using the company's platform that can output low-cost and more premium vehicles with less wiring and lower costs.

RJ Scaringe, Founder and CEO of Rivian added that "Rivian was created to help the world to transition away from fossil fuels through compelling products and services, and this partnership is beautifully aligned with that mission."

Rivian expects production costs per vehicle to drop thanks to the new funding, which will enable to scale-up of its more efficient manufacturing processes.