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 the deal is now worth $5.8bn (£4.55bn) – up from an initial pledge of $5bn by VW.

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.

“By combining their complementary expertise, the two companies plan to reduce development costs and scale new technologies more quickly,” the two companies said in a statement.

Under the plan, developers and software engineers from both firms will initially work side by side in California, while three other facilities in North America and Europe will be set up.

How are we to reconcile Janan Ganesh’s contention (Opinion, November 7) that “the Democrats threw away a winnable race” with John Burn-Murdoch’s view (Opinion, November 7) that “it’s possible there is just no set of policies . . . that can overcome the current global anti-incumbent wave”?

Simple. Although perhaps not in a way palatable to the commentariat. Joe Biden should have cut taxes on ordinary voters and offset this by raising tax for the wealthy and the most profitable corporations. The priorities of the Democrats would have been communicated. Would this have damaged the economy? Who knows. But probably not that much, and not at all before the election — and certainly a lot less than Trump’s proposed tariffs.

Will progressive politicians such as Rachel Reeves, the UK chancellor, learn the obvious lesson?

Charles Seaford
London SE10, UK

Reports that Russia is withholding critical environmental data necessary for scientific analysis of climate change prompts further calls for so-called “Arctic exceptionalism” (“Moscow is withholding vital Arctic climate data, warns Nato”, Report, October 29).

The Arctic, which once held the promise of transcending discord in the interests of co-operative research and environmental protection for the common good, has evolved into just another arena for geopolitical competition.

Often referred to as the canary in the coal mine, the Arctic is both at the forefront in its exposure to climate change and serves as an early warning system for the world, given its rate of warming far outpaces global averages and it hosts multiple tipping points.

Disputes over territorial rights of the seabed are rife and further complicated by ongoing terrestrial tensions which show no sign of easing. In addition to the eight states which are members of the intergovernmental Arctic Council, and the six indigenous peoples organisations which are permanent participants, China has emerged as a significant actor, having attained observer status and established its vision for a Polar Silk Road as part of the overarching Belt and Road Initiative. The “no limits” partnership between Russia and China has already manifested itself along the Northern Sea Route.

It is vital that all parties recognise the need to prevent a tragedy of the commons in the Arctic. This theatre for maritime statecraft requires prudent trans-boundary governance and strategic alignment to advance the “sustainable blue economy” to balance socio-economic development and ocean conservation.

Mark Eisinger
Rockville, MD, US

Chinese leader Xi Jinping is under heightened pressure to better secure his country’s interests in volatile regions around the world after a bomb attack by Pakistan separatists last month claimed the lives of two Chinese engineers.

With total Chinese investments estimated at US$62bn, the China Pakistan Economic Corridor is the largest cluster of projects under Xi’s Belt and Road Initiative but a spike of violence by the Balochistan Liberation Army is putting that commitment at risk and fuelling debate over Beijing’s failure to get to grips with the problem.

While Chinese investors are protected by a mix of Pakistan government and Chinese private security, the latter is hindered by Pakistan’s ban on armed guard services by foreign security contractors and Beijing’s tight grip on military and policing functions, even overseas. 

“I think this is the tipping point where Beijing is demanding something more from Islamabad in terms of a Chinese role in providing security,” said Alessandro Arduino, an expert on BRI security and private security contractors.  

“The evolution in Pakistan will also be a litmus test for Chinese private security companies around the world, and how Beijing wants to secure its citizens and assets worldwide.”

Islamabad has allocated big and growing forces to guarding China’s massive investments. Two special security divisions with more than 15,000 personnel in total and a naval unit stationed at Gwadar port protect CPEC projects and Chinese workers throughout Pakistan. Provinces have also provided special police units. Part of the cost of this protection is covered by China’s defence ministry, according to two people familiar with the situation. But it has not produced the security China is hoping for.

“We don’t trust that more Pakistani soldiers will keep us safe . . . we would prefer it was Chinese,” said one Chinese businessman, who works on a project in the province of Punjab but has been in the country for almost a decade. “Many Chinese want to leave, there’s not as much opportunity and the security is bad.”

Those concerns were further underscored when a Pakistani security guard shot and injured two Chinese workers in Karachi last week.

Beijing is not content with local security either. “The central government issued an internal directive to ‘let Chinese take care of the security of Chinese’,” said Zhou Chao, a Chinese executive who managed security services for the Lahore Metro Orange Line project after China Railway Group and Chinese arms exporter Norinco won the tender in 2015. 

Chinese private security companies have typically followed state-owned enterprises to guard their construction and resource projects abroad. Some observers expected them to grow into the equivalent of US military contractor Blackwater or Russian mercenaries Wagner Group, but Chinese experts say they are held back by a lack of support from Beijing and complex regulation. 

Pakistan bans foreign security contractors from providing armed guard services. “As a solution, we would station Chinese security officers at the project company, two at a time, and hire 400 to 500 local guards,” said Zhou, who worked for China Cityguard at the time but has since moved to China Soldier Security Group.

Other executives said they relied on Chinese security engineers to develop a security plan, handle incidents, conduct background and document checks, gather intelligence and hire local guards for armed patrols. 

The October blast, the latest in a string of attacks, has fuelled discontent with the current security set-up. “Our government has been discussing with Pakistan whether they can allow Chinese security companies in but have been explicitly rebuffed several times,” said a Chinese executive.

In a joint statement with Pakistan during Chinese Premier Li Qiang’s visit on October 15, China “stressed the urgent need to adopt targeted security measures in Pakistan to jointly create a safe environment for co-operation between the two countries”. Last week, Chinese ambassador Jiang Zaidong called it “unacceptable” that Chinese citizens had been attacked twice within six months. He warned that security had become a “constraint to CPEC”.

While overall Chinese finance and investment engagement under the BRI increased last year, according to the commerce ministry, it dropped 74 per cent in Pakistan. Frontier Services Group, the security contractor backed by Blackwater founder Erik Prince, said in its 2023 annual report that due to the instability in Pakistan, the Chinese government had encouraged employees of Chinese companies in Pakistan to return home. This has led to delays and abortion of projects.  

“The government is failing to comprehensively solve this security problem. [Our] risk consultants in Pakistan warned us about certain things, which later really happened, and I don’t know why our government could not prevent those,” said an executive at a large Chinese security company.

A big hurdle is the belief of the Chinese Communist party — which came to power through armed revolt — that it must retain a strict monopoly on military and policing functions. Beijing keeps tight restrictions on private security companies at home including a ban on carrying arms. Although existing legislation does not explicitly cover the contractors’ overseas expansion, it has hampered them.

According to Cheng Xizhong, a South Asia expert at Chinese think-tank Charhar Institute and former diplomat and defence attaché who also advises Chinese private security contractors, the Chinese embassy in Islamabad has a police counsellor telling security companies in Pakistan what should and should not be done.

“Some people see Chinese security contractors who go abroad as proxies for the Chinese People’s Liberation Army,” said a security company executive. “But unlike international military contractors that thrive on government contracts . . . we don’t get any . . . support.”

The latest uptick in casualties could add to pressure on Beijing to update legislation regulating private security companies. Amendments are expected to include clearer reference to overseas operations and be guided by an international code of conduct for the industry, according to scholars consulted on the draft amendments.

“A large portion of our overseas investment flows into” countries that it deems high risk, said the founder of one Chinese private security contractor. “So it really is high time that our government empower us to expand there.”

Additional reporting by Tina Hu and Wenjie Ding in Beijing

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President-elect Donald Trump announced on Tuesday that he would nominate Fox News host Pete Hegseth to be his secretary of defence and former Texas congressman John Ratcliffe to be director of the CIA, as he tapped hardliners and loyalists to his national security and foreign policy teams.

Hegseth, a 44-year-old army veteran who has no government experience, is an unconventional choice to lead one of the country’s largest employers, which includes almost 3mn military and civilian employees.

“Pete is tough, smart and a true believer in America First. With Pete at the helm, America’s enemies are on notice — our military will be great again, and America will never back down,” Trump said in a statement.

The president-elect had a fraught relationship with civilian and military leaders at the Pentagon during his first term in office, churning through five secretaries of defence in four years. The selection of Hegseth suggests he will have a close ally who will be willing to enact his policy pronouncements and decisions.

Ratcliffe, who was director of national intelligence in the final year of Trump’s first term, is another staunch ally who, while in Congress, was a sharp critic of special counsel Robert Mueller’s probe into Russian interference in the 2016 election.

“John Ratcliffe has always been a warrior for truth and honesty with the American public,” Trump said. “He will be a fearless fighter for the constitutional rights of all Americans, while ensuring the highest levels of national security, and peace through strength.”

Critics of Ratcliffe’s tenure as director of National Intelligence said he used the post to carry out Trump’s political agenda, including declassifying intelligence to use for political purposes, excluding Democratic lawmakers from briefings, accusing opponents of leaks and making public assertions that contradicted intelligence assessments.

If Ratcliffe is confirmed, he will be the first person to be have held the roles of CIA director and director of national intelligence.

The appointments were among a series announced by Trump’s transition team on Tuesday.

Earlier in the day, Trump said he would nominate former Arkansas governor Mike Huckabee as US ambassador to Israel and that his longtime friend, donor and fellow real estate mogul Steve Witkoff to be his special envoy for the Middle East. He also nominated South Dakota governor Kristi Noem as homeland security secretary, with a mandate to stem immigration across the US southern border.

Trump on Monday picked a number of other loyalists with hardline views who will shape US foreign policy decisions in his new administration. They include Florida congressman Mike Waltz as national security adviser and New York congresswoman Elise Stefanik as ambassador to the UN. Marco Rubio, the Florida senator, is widely expected to become secretary of state.

Trump’s Middle East appointments are a sign that the US will take an even friendlier approach than Joe Biden’s administration towards the Israeli government led by Benjamin Netanyahu, potentially allowing it to continue its military campaigns against Hamas and Hizbollah.

During the presidential campaign, Trump was able to win over a larger share of Arab-American voters than he did in 2020 because of their anger at Biden’s support for Israel’s war in Gaza, vowing to deliver peace to the region.

But is not clear that a closer US relationship with Netanyahu will help end the conflicts in the Middle East. Huckabee, whose daughter Sarah Huckabee Sanders is the current Arkansas governor — spent years working to bolster support for Israel among evangelical Christians in the US and was praised by Trump on Tuesday.

“Mike has been a great public servant, Governor, and Leader in Faith for many years. He loves Israel, and the people of Israel, and likewise, the people of Israel love him. Mike will work tirelessly to bring about Peace in the Middle East!” Trump said. 

Witkoff — who called Netanyahu’s address to Congress earlier this year “epic” and “deeply moving” — is co-chair of Trump’s inaugural committee, along with former US senator and Intercontinental Exchange executive Kelly Loeffler.

Witkoff has known Trump for decades. He spoke at the Republican National Convention touting the former president’s “compassion” and was on the golf course with him during the second assassination attempt on him in September.

The two men’s sons are also friends: Donald Trump Jr, Eric Trump, Alex Witkoff and Zach Witkoff promoted a cryptocurrency company, World Liberty Financial, on X a couple of months ago. Zach had his wedding at Trump’s Mar-a-Lago resort in Florida in 2022.

Alex Witkoff, who is co-chief executive of family real estate firm Witkoff Group with his father Steve, told the Financial Times last week that his identity as a Jewish person was a reason for his support of Trump.

“In Trump, you had a fierce, ardent supporter of the Jewish people,” he said.