Top Line
Rivian shares rose more than 28% on Wednesday, on track for the company’s biggest one-day gain in history after the automaker announced a joint venture with Volkswagen that could involve an investment of up to $5 billion.
The two companies also plan to establish a joint venture to develop an automotive software platform.
Key Facts
Rivian’s shares surged to more than $15 as of about 10:45 a.m. Wednesday after surging in after-hours and premarket trading, boosting the company’s market capitalization from $11.9 billion to more than $15 billion.
Prior to Wednesday, Rivian’s biggest single-day gain was on Nov. 11, 2021, when the stock price rose more than 22% on its first day publicly traded.
Rivian and Volkswagen announced on Tuesday they have agreed to form a joint venture to develop an automotive software platform based on Rivian technology.
Volkswagen Group CEO Oliver Bloom said the company will invest $1 billion in Rivian, then up to an additional $4 billion by 2026 if the partnership meets unspecified technical goals.
Bloom said the joint venture, which has not been named, will combine news and entertainment media, wireless connectivity and self-driving capabilities.
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Main Background
Rivian shares have fallen nearly 88% since the start of trading in 2021 and are down 25% so far this year. The electric car maker, backed by Amazon and Ford, debuted as the most well-funded auto startup in U.S. history with a $78 IPO and was briefly the second-most valuable automaker after Tesla, according to Reuters. Rivian reported first-quarter sales of $1.2 billion this year, up slightly from the same period last year and beating analysts’ expectations, but also reported a net loss of $1.4 billion. At the time, Rivian said it would increase production of a new affordable midsize SUV and two compact crossovers.
tangent
Rivian announced last month that it would receive $827 million from the state of Illinois to expand its factory in Normal, Illinois. The company said the expansion is expected to begin in the “coming months,” and that the plant has built more than 100,000 electric vehicles since starting production in 2021. News of the state’s investment comes after Rivian indefinitely suspended plans to build a $5 billion factory in Georgia.
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