Why VW and Rivian combine to launch an EV of $ 21,500

• VW unveiled on Wednesday 21,500 EV on Wednesday, but do not expect it to happen in the United States anytime soon.
• The compact ID. Each1 will be the first car to incorporate software from the startup EV Rivian.
• The two companies concluded a partnership of $ 5 billion last year and are both faced with their own imminent challenges.

Volkswagen and Rivian combine on an ultra-cotobic EV, and once again, the Americans can only look in the Atlantic in envy.

After several months of teasing, Volkswagen unveiled the ID.Every1 Wednesday, with a version of the compact electric car which should be put up for sale for 20,000 euros ($ 21,500) in Europe by 2027.

The four -seat EV 13 feet long behaves in a small package, including 155 meals of range and a customizable dashboard – but the most interesting thing on this subject is what is happening behind the scenes.

The production version of the ID.Every1 will be the first vehicle to include software developed with EV Startup Rivian, a Volkswagen spokesperson confirmed to Business Insider.

The two companies announced an agreement last year which would see the German automobile giant investing more than $ 5 billion in Rivian and forming a joint venture to develop new generation software and electric vehicle technology.

This agreement quickly became a vital part of Volkswagen’s strategy to transform its automobile activities struck by crisis.

The almost centenary car manufacturer has seen sales collapse in Europe and China, its two most important markets, thanks to lower than expected demand for electric vehicles in the first and brutal competition of local rivals in the second.

VW also resisted a deadly fight with workers’ unions on restructuring plans last year and promised to reduce 35,000 jobs by 2030.

The company now faces the prospect of its Chinese competitors selling their affordable electric vehicles in its backyard, with ambitious extension plans by Byd and Xpeng in Europe.

Just as VW is confronted with many of the same problems as the other inherited car manufacturers, Rivian’s challenges have the same flavor as those of other emerging EV companies.

The startup, known for its sports electric trucks and SUV, plans to publish cheaper electric vehicles in the coming years, but still loses nearly $ 40,000 on each vehicle it sells.

Rivian also faces Trump’s imminent disruption ending the federal support for electric vehicles, and combating a slowdown in sales of electric vehicle sales which has experienced several electric vehicle startups that have become public at the same time in bankruptcy in recent months.

The agreement with VW gives Rivian a crucial financial rescue because it increases production.

For VW, it allows the German automaker to incorporate the know-how of electric vehicles and Rivian software in its range of affordable electric vehicles, starting with the ID.

Other European car manufacturers such as Renault and Stelllantis also deploy their own affordable electric vehicles – but there is no sign of inexpensive electric vehicles reaching the United States for the moment.

While a production version of the ID.Every1 should be launched in Europe in 2027, VW has provided no details on an American launch.

This means that ID. With the prospect of prices on European cars and the end of government grants for electric vehicle vehicles to be floated by the Trump administration, it is unlikely to change anytime soon.