We’ve got some positive news from Volkswagen and Rivian this month, but we’ve also got a matter of concern for Volkswagen that could be quite costly. Volkswagen × Rivian Going Well One of Volkswagen’s big EV plays in the past several years has been partnering with Rivian, including investing in the company. The German automaker decided it needed help on the software side of vehicles in this era, and Rivian needed cash, so they became great partners. Plenty of partnerships like this fizzle and fade away, but this one seems to be going very well. At the same time, Rivian is prepping for sale of its first semi-affordable model and ready to scale up significantly. So, Volkswagen has just decided to invest more in the young electric vehicle company. Through private placement, the German giant bought more shares of Rivian (NASDAQ:RIVN) and grown its stake in the company to 15.9%. That’s quite a large stake in a company at Rivian’s stage! In June 2024, Volkswagen invested $1 billion into Rivian, giving it 8.6% stake in the company. Naturally, if Volkswagen didn’t like what it was seeing, that would have been that. However, the partnership has grown and grown. When Rivian made back-to-back gross profit in two quarters in 2025, Volkswagen invested another $1 billion. Last month, the German automaker invested yet another $1 billion (by buying 62,889,522 Class A shares at $15.90 a pop) after Rivian achieved certain testing milestones. In total, assuming all goes well, Volkswagen is supposed to commit $5.8 billion to Rivian through 2027. €1.5 Billion in Fines for EV Sales Shortfall Once upon a time, Volkswagen looked like it had super ambitious plans for EV sales. This followed the company getting busted in a massive diesel vehicle emissions scandal. It looked like Volkswagen wanted to turn things around and become a leader in the EV transition globally. And it’s done alright in that regard, but not superbly. For example, it’s the #1 automaker for EV sales in Europe, but it’s 4th globally. Also, it’s still selling a lot of non-electric cars. In fact, the share of its sales that are electric doesn’t seem to be adequate even in Europe compared to its overall vehicle sales. The company hasn’t been selling enough electric vehicles to meet its overall fleet emissions requirements. It may have to pay €1.5 billion (~$1.75 billion) in fines if it can’t turn that around for the 2025–2027 period. Of course, there’s another issue. Volkswagen says it makes about 30% more profit on non-electric cars than electric ones. That’s not even taking into account service revenue. I wonder which powertrain is going to get prioritized…. The market is shifting, but how fast, we’ll see. The European EV market once led the Chinese EV market, but now it’s far behind. Perhaps Volkswagen’s partnership with Rivian will give it a boost soon and help get Volkswagen back on track.