Volkswagen Group to Invest $5B in Rivian for Joint EV Venture

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Key Takeaways

  • Volkswagen Group plans to invest up to $5 billion in Rivian, forming a joint venture to share EV architecture and software.
  • The partnership aims to accelerate the development of next-generation software-defined vehicle platforms, enhancing efficiency and innovation.
  • Rivian shares jumped 37% following the announcement, potentially increasing the company’s market value by nearly $6 billion.

Volkswagen Group has announced plans to invest up to $5 billion in US electric vehicle maker Rivian, forming a joint venture to share EV architecture and software.

This partnership aims to accelerate the development of next-generation software-defined vehicle (SDV) platforms.

Key Points of VW and Rivian Joint Venture

According to an official statement, Volkswagen Group will initially invest $1 billion in Rivian, with plans for an additional $4 billion, bringing the total investment to $5 billion.

The joint venture will leverage Rivian’s existing software and electrical architecture to develop advanced SDV platforms for both companies’ future electric vehicles.

The collaboration is set to enhance software development efficiency, lower costs, and expedite innovation. Both companies plan to launch vehicles with the new technology in the second half of the decade. In the short term, Volkswagen Group will utilize Rivian’s existing electrical architecture and software platform.

Oliver Blume, CEO of Volkswagen Group, highlighted the partnership’s benefits, stating:

“Our customers will gain from this targeted cooperation with Rivian, which aligns perfectly with our software strategy and enhances our competitive edge.”

RJ Scaringe, Founder and CEO of Rivian, expressed excitement about the partnership, noting that it would expand the reach of Rivian’s technology and support the company’s growth goals.

Pending regulatory approvals and the completion of definitive agreements, the joint venture is expected to be finalized by the fourth quarter of 2024.

Rivian Shares Jump 37%

Shares of Rivian surged by 37% in extended trading, potentially increasing the company’s market value by nearly $6 billion.

Rivian Automotive entered the public market with its initial public offering (IPO) on November 10, 2021. The IPO was among the most anticipated in the EV sector, reflecting high investor interest in clean energy and sustainable transportation solutions. Rivian’s shares debuted on the NASDAQ under the ticker RIVN. The company raised approximately $13.7 billion by selling 153 million shares at $78 each.

However, the company’s shares plunged 90% since then despite its IPO being the most successful offering in the U.S. since 2014.