• Upstart electric vehicle maker Rivian said Volkswagen is investing up to $5 billion in the electric vehicle maker.
  • An additional investment of up to $2 billion in Rivian’s stock is to take place in two portions of $1 billion each in 2025 and 2026.

OUR TAKE This collaboration reflects the growth and trends of the global electric vehicle market. As a traditional automobile manufacturing giant, Volkswagen has chosen to cooperate with emerging electric vehicle companies, showing its emphasis on electrification transformation and strategic layout. This is not only driving advances in EV technology, but also contributing to the global automotive industry moving in a greener and more sustainable direction.

Upstart electric vehicle maker Rivian said Volkswagen is investing up to $5 billion in the electric vehicle maker.

What happened

Upstart electric vehicle maker Rivian said Volkswagen is investing up to $5 billion in the electric vehicle maker and that the two companies are forming a joint venture to develop an automotive software platform based on Rivian technology. Collaborating with one of the world’s biggest automakers could also help Rivian reduce some of its component and materials costs.

“Initially, we are investing $1 billion in Rivian and are planning further investments of up to $4 billion,” CEO of Volkswagen Group Oliver Blume said in a media call. “The additional investments will take place through 2026,” assuming the partnership achieves specific technical milestones, he said, without elaborating.

Support for the Irvine, California-based electric vehicle maker from one of the world’s automotive giants — combined with its ongoing relationship with Amazon, its biggest investor and top buyer of its electric delivery trucks — may help ensure that Rivian launches its next products, the midsize R2 electric SUV and compact R3 crossover, on time. The new funds could also help it resume construction of its Georgia plant, mothballed early this year as a cost-saving measure.

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Why it’s important

The 50-50 tech venture between the companies, which doesn’t yet have a name, will focus on integrating infotainment, wireless connectivity and autonomous driving functions, among other things, Blume said. Rivian’s “zonal” hardware design and integrated technology platform will be the foundation for the new software platform the companies will share.

“Key for these types of collaborative relationships to work in our view is that there’s mutual benefit to both sides,” said RJ Scaringe, Rivian’s founder and CEO. “The scale that Volkswagen brings, the portfolio of outstanding brands that they bring, the opportunity to apply that scale to achieve meaningful cost savings across our build of materials and across our business, coupled with the ability to drive the acceleration of this technology to more products on the Volkswagen side — it really is highly complementary.”

Volkswagen’s initial $1 billion investment is being made through a convertible note offering. An additional investment of up to $2 billion in Rivian’s stock is to take place in two portions of $1 billion each in 2025 and 2026, the companies said.