Rivian, the electric vehicle (EV) startup, saw its shares leap by 50% in extended trading on Tuesday.
This surge followed the announcement by the German automotive giant, Volkswagen, of a $5 billion investment in Rivian.
This strategic investment is part of a newly established, equally controlled joint venture aimed at sharing EV architecture and software development.
On Tuesday, Rivian’s shares climbed by 8.6% during regular trading hours and surged by an astonishing 49.9% to $17.93 in after-hours trading.
This significant increase boosted the company’s market value by nearly $6 billion. However, despite this recent uptick, Rivian’s stock remains down over 43% year-to-date (YTD).
As part of this joint venture, Rivian will license its existing intellectual property. The first vehicle to benefit from the joint venture’s software will be the R2.
Following this, Volkswagen‘s various brands, including Audi, Porsche, Lamborghini, and Bentley, will start incorporating the joint venture’s software into their vehicles.
Volkswagen’s investment in Rivian is structured in multiple phases:
Rivian CEO RJ Scaringe took to the social media platform X to express his enthusiasm about the partnership.
He stated, “The partnership brings Rivian’s software and zonal electronics platform to a broader market through Volkswagen Group’s global reach and scale while providing an expected $5 billion of capital to Rivian as we bring R2 and our next generation of vehicles to market!”
This substantial investment is expected to provide Rivian with the necessary funding to develop its more affordable and compact R2 SUVs, which are slated for release in early 2026, as well as its planned R3 crossovers.
Rivian reported a loss of $1.45 billion in its most recent quarter. The formation of this joint venture with Volkswagen is anticipated to help Rivian move towards becoming cash-flow positive.
The influx of capital will support Rivian in accelerating the development and production of its upcoming vehicle models, ultimately aiming to strengthen its position in the highly competitive EV market.
The collaboration with Volkswagen is a strategic move for Rivian, leveraging Volkswagen’s extensive global reach and resources.
This partnership not only brings in significant capital but also aligns with Rivian’s vision of expanding its market presence and accelerating its technological advancements.
The joint venture will enable Rivian to tap into Volkswagen’s established infrastructure and expertise in automotive manufacturing, potentially leading to more efficient production processes and reduced costs.
The investment and partnership between Rivian and Volkswagen is a noteworthy development in the EV market.
It underscores the growing trend of traditional automakers investing in and collaborating with innovative EV startups to stay competitive and relevant in the rapidly evolving automotive industry.
This collaboration is likely to spur further investments and partnerships in the sector, driving innovation and accelerating the adoption of electric vehicles globally.
The announcement of Volkswagen’s $5 billion investment in Rivian has resulted in a significant surge in Rivian’s share price, reflecting investor confidence in the potential of this partnership.
The strategic joint venture is poised to provide Rivian with the financial resources and technological expertise needed to bring its next generation of vehicles to market and achieve long-term growth.
As the EV market continues to expand, such collaborations will play a crucial role in shaping the future of transportation.
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