SAN FRANCISCO –German automaker Volkswagen Group will invest up to $5 billion in U.S. electric-vehicle maker Rivian. This Volkswagen Rivian investment is part of a new, equally controlled joint venture. The companies aim to share EV architecture and software, enhancing their collaborative efforts.
Shares of Rivian surged by about 50% in extended trade after the announcement, potentially supercharging the company’s market value by nearly $6 billion, if gains hold on Wednesday.
The auto industry faces a crucial time as EV startups grapple with a slowdown in demand amid high interest rates and dwindling cash, while traditional automakers struggle to build battery-powered vehicles and advanced software.
The investment will provide Rivian the funding necessary to develop its less expensive and smaller R2 sport utility vehicles that are set to roll out in early 2026 and its planned R3 crossovers, CEO R.J. Scaringe said.
It will also help Rivian, known for its flagship R1S SUVs and R1T pickups, turn cash-flow positive. The company will license its existing intellectual property rights to the joint venture, and the R2 will be the first vehicle using software from it. Volkswagen vehicles, including ones under its Audi, Porsche, Lamborghini and Bentley brands, will follow.
“Any cash infusion like that is huge. Getting the support of Volkswagen Group certainly really strengthens their story toward Europe and toward Asia eventually,” said Vitaly Golomb, managing partner at Mavka Capital in San Francisco, an investor in Rivian.
For Volkswagen, analysts and investors see the investment as a move to solve the company’s software struggles. Volkswagen’s software division, Cariad, has exceeded its budget and failed to meet goals. This failure contributed to Herbert Diess’ exit in September 2022.
Overall, the Volkswagen Rivian investment marks a pivotal moment in the electric vehicle sector, fostering collaboration and growth.
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