FirstFT: Volkswagen and Rivian agree joint venture

Good morning. After-hours trading suggests Rivian’s shares could rise by more than 50 per cent when trading begins in New York this morning after German carmaker Volkswagen agreed to invest up to $5bn over the next two years in a partnership with the electric vehicle start-up.

The tie-up comes as VW, Europe’s largest carmaker, looks to beef up its electric vehicle offering in the face of sophisticated competition from Tesla and Chinese rivals.

VW’s shares fell, however, in early European trading as investors reacted negatively to the cost of the 50/50 joint venture with the US group. Here’s more on the deal.

• Read more about Rivian: FT reporter Claire Bushey last year visited Normal, Illinois, the home of the electric truck maker.

Here’s what else I’m watching today:

• Julian Assange: The WikiLeaks founder is expected to return home to Australia after pleading guilty in a US court on the Northern Mariana Islands to one charge of conspiracy to obtain and disseminate classified information linked to US national defence.

• Economic data: In the US new homes data for May are released, Brazil’s statistics agency IBGE publishes inflation data for the first half of June and Argentina will publish first-quarter current account data.

• Companies: US chipmaker Micron, food manufacturer General Mills and denim manufacturer Levi Strauss & Co report results.

Five more top stories

1. Wall Street Journal reporter Evan Gershkovich has appeared in a district court in the Russian city of Ekaterinburg to stand trial on charges of espionage as the US tries to secure his release in a prisoner exchange. Gershkovich faces a possible sentence of up to 20 years in prison if he is found guilty of espionage. Here’s the latest on the secret proceedings.

2. US companies have been able to reprice almost $400bn of debt at lower interest rates this year due to booming investor appetite for junk loans. According to strategists at Goldman Sachs, even before the Federal Reserve cuts interest rates from a 23-year high, a number of borrowers in the US leveraged loan market have benefited from the equivalent of two quarter-point Fed cuts.

• More on US interest rates: A top Federal Reserve official has backed more interest rate rises if inflation sticks at its current level.

3. Jamaal Bowman has become the first member of the leftwing “Squad” to be ousted by the Democratic party establishment after a New York congressional primary inflamed by tensions over Israel’s war in Gaza. It was the most expensive primary in the party’s history. Bowman, a Black former middle school principal, was defeated by George Latimer, a local county executive. The result was called less than an hour after polls closed.

4. The Philippine ambassador to Washington has warned that a conflict with China over a contested reef in the South China Sea could engulf countries across the Indo-Pacific, raising the spectre of a possible nuclear war. Jose Manuel Romualdez said the dispute with China over the Second Thomas Shoal had created an incendiary situation. Read the full interview.

5. Geopolitical tensions and climate change could lead to “food wars” as countries fight for waning supplies, one of the world’s largest agricultural commodity traders has warned. Sunny Verghese, chief executive of Olam Agri, warned that trade barriers imposed by governments seeking to shore up domestic food stocks had exacerbated food inflation.

Today’s big read

Our latest visual investigation explores how the Taliban in Afghanistan has issued dozens of mining contracts to tap the country’s natural resources. Using maps, video and satellite imagery, the FT in association with the Centre for Information Resilience, a UK-based non-profit group, tells the story of how the Taliban is exploiting an estimated $1tn of gold, oil and mineral reserves — especially nephrite, a type of jade prized in China.

We’re also reading . . . 

• US election: Many business leaders dismiss fears of a return of the former president Donald Trump to the White House — they are wrong to do so, argues Martin Wolf.

• ‘If the courts adjust, we adjust’: Top securities regulator Gary Gensler says he is determined to keep advancing the SEC’s rulemaking despite pushback.

• Climate change: Denmark is moving ahead with the world’s first carbon tax on agriculture, by charging farmers €100 a year for greenhouse gasses emitted by their cows.

Chart of the day

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Europe’s armies are shrinking. On paper, European Nato allies have 1.9mn troops between them — seemingly enough to counter Russia (1.1mn soldiers and 1.5mn reservists). But in reality, European Nato powers would struggle to commit any more than 300,000 troops to a conflict — and even then that would take months of preparation, analysts tell the FT.

Take a break from the news

Shun common containers and embrace the rusty, ramshackle and radical for greenery with added interest, writes FT Weekend columnist Luke Edward Hall. Here are his suggestions for pots that will give your plants a pick-me-up.

Additional contributions from Tee Zhuo and Emily Goldberg