Prof G Markets: Rivian and Volkswagen’s New Partnership + Scott’s Tax Strategy

Partnerships

Scott Galloway discusses the strategic partnership between Rivian and Volkswagen, highlighting its potential benefits for both companies. Rivian, struggling financially, stands to gain from Volkswagen's manufacturing prowess, while Volkswagen can leverage Rivian's EV software to enhance its electric vehicle offerings. This partnership has already impacted the market, with Rivian's shares soaring by over 50% after the announcement, although Volkswagen's shares dipped slightly 1.

Rivian is a really cool brand. It's a really beautifully designed car, I imagine has some software and battery technology.

--- Scott Galloway

Galloway notes that Rivian's brand equity and technology make it an attractive partner for Volkswagen, which is eager to advance in the EV market 2.

   

Market Struggles

The financial struggles of Rivian are a focal point, with the company losing approximately $40,000 per vehicle and facing a significant cash burn. Ed Mylett and Scott Galloway discuss how Rivian's market valuation has plummeted from $130 billion to around $15 billion, emphasizing the dire situation before Volkswagen's intervention 3.

This is how fucked up this company is. Worth $12 billion. Ford Motors, worth $12.3 billion.

--- Scott Galloway

The Volkswagen investment is seen as a crucial lifeline for Rivian, providing much-needed capital to extend its runway and potentially stabilize its financial position 4.

   

Industry Outlook

Scott Galloway offers insights into the broader EV industry, predicting a phase of consolidation and challenges for startups. He suggests that the industry is entering a "valley of death," where weaker players may be forced out or require additional capital to survive 4.

It feels like we're entering the valley of death, and that is companies are either going to go out of business or need more capital.

--- Scott Galloway

Galloway highlights the importance of scale in automobile manufacturing, noting that companies like Volkswagen, with their ability to push volume through shared platforms, are better positioned to thrive in this competitive landscape 2.