The news may provide respite for concerned investors amid fears of anti-EV policies imposed by the new Trump administration
Rivian (NASDAQ:RIVN) stock accelerated 11% higher early Wednesday morning after the Tesla rival revealed a new joint venture with German automaker Volkswagen AG (OTCMKTS:VWAGY).
The deal, worth as much as $5.8 billion, will fuse Rivian’s technology with VW’s capital to upgrade the electrical architecture and software technology of both automakers’ future electric vehicles (EVs).
The announcement offers investor relief amid concerns about soft European EV demand, fierce competition in China, fears of a Trump administration curtailing EV-supportive policies, and the poor performance of RIVN stock this year.
“Faster, leaner, more efficient”
Touting the joint venture with Rivian, Volkswagen group published a press release entitled “Faster, Leaner, More Efficient”. The fresh partnership is the “next logical step in strengthening our global competitive and technological position”, CEO Oliver Bloom said in the release.
Meanwhile, Rivian Automotive CEO RJ Scaringe made it clear that his company would provide the technological upgrades in this mutually beneficial partnership.
“We’re thrilled to see our technology being integrated in vehicles outside Rivian – this is an important enabler to help accelerate EV adoption,” Scaringe declared.
The press release did not provide many specifics about the technological upgrades. However, the joint venture promised to produce “modular and flexible state-of-the-art electrical architecture”.
Additionally, the joint venture should facilitate the launch of Rivian’s R2 electric SUV in the first half of 2026 as well as Volkswagen’s upcoming EV models as early as 2027.
Volkswagen’s sizable capital commitment
While both automakers are expected to benefit from Rivian’s tech enhancements, Rivian Automotive will receive a sizable and well-timed capital infusion.
Specifically, Volkswagen Group will invest up to $5.8 billion in Rivian Automotive and the joint venture by 2027, including Volkswagen’s initial convertible-note investment of $1 billion.
Later, at the closing of the joint venture, Volkswagen Group plans to invest around $1.3 billion “as consideration for background [intellectual property] licenses” plus a 50% equity stake in the joint venture.
Volkswagen’s remaining investment of as much as $3.5 billion is “expected to come in the form of equity, convertible notes, and debt at future dates and based on clearly defined milestones”.
