SAN FRANCISCO (Reuters) -German automaker Volkswagen Group will invest up to $5 billion in U.S. electric vehicle maker Rivian as part of a new, equally controlled joint venture to share EV architecture and software, the companies said on Tuesday.
Rivian shares rose 30% in extended Nasdaq trading after the announcement, boosting the company’s stock market value by more than $3 billion.
The investment will give Rivian – known for its flagship R1S SUVs and R1T pickups – the financing it needs to develop its cheaper and smaller R2 SUVs that will go on sale in 2026, CEO RJ Scaringe told Reuters.
Volkswagen will initially invest $1 billion in Rivian and an additional $4 billion in investments later, the companies said.
The partnership will allow Volkswagen to accelerate its plans to develop software-defined vehicles (SDV), with Rivian licensing its existing intellectual property rights to the joint venture.
As EV startups struggle with a slowdown in demand due to high interest rates and dwindling cash, traditional automakers have struggled to build battery-powered vehicles and advanced software.
(Reporting by Abhirup Roy in San Francisco; additional reporting by Noel Randewich; Editing by Rod Nickel)
