Volkswagen AG will invest $5 billion to form a joint venture with electric vehicle maker Rivian Automotive Inc., offering a lifeline to the struggling startup and giving the German automaker access to the company’s technology. American electric vehicle company.
VW said in a statement that it will invest $1 billion in Rivian immediately and an additional $4 billion over time. The new joint venture will be “equally controlled and owned,” the companies said. The companies say they will develop “next generation” battery-electric vehicles with cutting-edge software.
Shares of Rivian soared in aftermarket trading, up as much as 37%. As of Tuesday’s close, Rivian’s stock was down 49% for the year.
“Through collaboration, we will deliver the best solutions for our vehicles faster and at lower cost,” said Oliver Blume, CEO of VW. “We are strengthening our technology profile and competitiveness.”
The pact gives Rivian a much-needed infusion of new capital after the company struggled to ramp up production and deliveries of electric pickup trucks and SUVs.
As for VW, the German auto giant gets access to the EV startup’s EV software and architecture after years of struggling to launch plug-in vehicles with equal efficiency and functionality. equal to the word means Tesla Inc.
According to a joint statement from both companies, both companies plan to introduce vehicle models using technology created by the joint venture in the second half of this decade.
