Volkswagen Logo Photo Credit: Sean Gallup
Volkswagen Group will spend up to $5 billion in Rivian in a new, equally controlled joint venture to share EV architecture and software, the firms announced Tuesday.
Shares of Rivian rose 30% in extended Nasdaq trading after the announcement, increasing its market worth by over $3 billion.
EV companies face a decrease in demand due to rising interest rates and dwindling funds, while major automakers need help to produce battery-powered vehicles and intelligent software.
Volkswagen would spend $1 billion in Rivian and $4 billion eventually, the businesses announced.
Rivian CEO RJ Scaringe told Reuters that the financing will fund the development of the 2026 R2 SUVs and R3 crossovers.
It will also enable Rivian, known for its R1S SUVs and R1T pickups, to turn cash flow positive.
Rivian will license its intellectual property to Volkswagen to boost SDV development.
Volkswagen announced earlier this year that it would launch 25 EV cars in North America across its group brands by 2030, despite slowing market growth.
“Their recent cost-cutting was one thing, but they needed something to get past the R2s launch. This expands that range “AutoForecast Solutions vice president Sam Fiorani stated.
Scaringe told reporters during an exclusive tour of Rivian’s Normal, Illinois, facility on Friday that removing equipment from its plant and parts from its vehicles has reduced van cost of materials by 35% and other lines by a “similar magnitude”.
S3 Partners data shows that 18% of Rivian’s shares were sold short recently.
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