Volkswagen Group CEO Oliver Bloom (left) and Rivian founder and CEO RJ Scaringe
Rivian
Rivian, an electric-vehicle startup, said Volkswagen will invest up to $5 billion in the company and the two companies will set up a joint venture to develop an automotive software platform based on Rivian technology. A partnership with one of the world’s largest automakers could also help Rivian cut costs for parts and materials.
Rivian shares, which rose about 9% on Tuesday, rose more than 50% to $18.49 in after-hours trading on the Nasdaq.
“We will initially invest $1 billion in Rivian and plan to invest up to an additional $4 billion,” Volkswagen Group CEO Oliver Blum said at a news conference. “Additional investments will run through 2026,” he said, without providing details.
The backing of the Irvine, California-based electric vehicle maker from one of the world’s largest automakers, combined with an ongoing relationship with Amazon, the company’s largest investor and the largest buyer of its electric delivery trucks, could help Rivian launch its next products, the R2 midsize electric SUV and the R3 compact crossover, on schedule. The new funding could also help it resume construction on its Georgia factory, which was idled earlier this year as a cost-cutting measure.
The Rivian R3 electric crossover is expected to arrive sometime after the company’s new R2 SUV debuts in 2026.
Rivian
Importantly, the partnership gives Rivian an edge in competing with Elon Musk’s Tesla as the major electric vehicle maker looks to shift its business model from selling more vehicles to running a robotaxi operation.
The 50-50 split between the two companies will focus on integrating infotainment, wireless connectivity and autonomous driving capabilities, Bloom said. Rivian’s “Zone” hardware design and integrated technology platform will form the foundation for a new software platform that the two companies will share.
“We think the key to making this kind of collaboration work is that it’s mutually beneficial,” said Rivian founder and CEO RJ Scaringe. “The scale that Volkswagen brings, the great portfolio of brands that they bring, the opportunity to leverage that scale to realize significant cost savings across our materials manufacturing and operations, and the ability to accelerate this technology into more products on the Volkswagen side. Those are really very complementary.”
Volkswagen’s initial $1 billion investment will come through a convertible note offering. An additional investment of up to $2 billion in Rivian shares will come in two installments of $1 billion each in 2025 and 2026, the companies said. The remaining $2 billion will be paid in cash as the new venture begins operations and in the form of a loan in 2026.
