Volkswagen Group (VW) and Tesla rival Rivian have launched a joint venture, with the German car giant increasing its investment in the partnership.
The two companies say the deal is now worth $5.8bn (£4.55bn) – up from an initial pledge from VW of $5bn.
Shares in the US electric vehicle (EV) maker jumped more than 9% in after-hours trading following the announcement.
The tie-up will see the firms sharing critical technology at a time of slowing global demand for electric cars and increased competition from Chinese rivals.
The joint venture provides loss-making Rivian with a crucial source of funding as it prepares for the launch next year of its R2 model – a sports utility vehicle (SUV) that is smaller and more affordable than its current offerings.
It also means VW will be able to use Rivian’s technology in its own range of vehicles.
The first VW models equipped with Rivian technology are expected to be available to customers as early as 2027.
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