Workers
assemble
second-generation
R1
vehicles
at
electric
automaker
Rivian’s
manufacturing
facility
in
Normal,
Illinois,
on
June
21,
2024.
Joel
Angel
Juarez
|
Reuters
Volkswagen
Group
plans
to
invest
up
to
$5
billion
in
electric
vehicle
startup
Rivian,
starting
with
an
initial
investment
of
$1
billion.
The
additional
$4
billion
is
expected
by
2026.
It
includes
plans
for
$1
billion
each
in
2025
and
2026,
followed
by
$2
billion
in
2026
related
to
an
expected
joint
venture
to
create
electrical
architecture
and
software
technology,
according
to
a
release
by
the
automakers
Tuesday.
Shares
of
Rivian
soared
more
than
50%
during
after-hours
trading
Tuesday,
two
days
ahead
of
an
investor
event
for
Rivian,
which
has
been
under
pressure
from
Wall
Street
due
to
its
cash
burn
and
significant
losses.
Rivian
stock
closed
Tuesday
at
$11.96
a
share,
down
roughly
49%
in
2024.
The
initial
$1
billion
from
Volkswagen
will
be
in
the
form
of
a
convertible
note,
which
could
be
converted
to
Rivian
shares
on
or
after
Dec.
1,
the
release
said.
The
deal
will
help
Rivian
on
its
journey
to
become
cash
flow-positive,
Rivian
CEO
and
founder
RJ
Scaringe
said
Tuesday
night
during
an
investor
call.
He
noted
the
capital
is
expected
to
carry
the
company
through
the
production
ramp-up
of
its
smaller
R2
SUVs
at
its
plant
in
Normal,
Illinois,
starting
in
2026,
as
well
as
production
of
the
midsize
EV
platform
at
a
plant
in
Georgia,
where
Rivian
paused
construction
earlier
this
year.
watch
now
“We
believe
the
opportunity
ahead
is
significant.
This
deal
is
possible
because
we’re
focused
on
vertically
integrating
our
network
architecture,
topology,
V-CPUs,
and
associated
software
platforms,”
he
said.
“I’ve
spoken
about
the
importance
of
these
platforms
in
the
past,
and
how
difficult
it
is
to
replicate
them.”
Volkswagen
is
expected
to
use
Rivian’s
electrical
architecture
and
software
stack
for
vehicles
beginning
the
second
half
of
the
decade,
according
to
Scaringe.
He
said
the
joint
venture
does
not
include
anything
with
battery
technologies,
vehicle
propulsion
platforms,
high
voltage
systems
or
autonomy
and
electrical
hardware.
Scaringe
said
the
expected
joint
venture
will
be
led
by
a
“balanced”
leadership
group, including
two
co-CEOs,
with
Rivian
appointing
the
technical
leadership
and
Volkswagen
appointing
a
chief
operating
officer.
The
closing
of
the
joint
venture
is
expected
in
the
fourth
quarter
of
this
year,
according
to
Rivian
Chief
Financial
Officer
Claire
McDonough.
A
provided
image
of
Oliver
Blume,
CEO
of
Volkswagen
Group
and
RJ
Scaringe,
founder
and
CEO
of
Rivian,
as
the
companies
announce
joint
venture
plans
on
June
25,
2024.
Courtesy:
Business
Wire
Volkswagen
will
be
the
second
legacy
automaker
to
take
a
stake
in
the
California-based
company.
Ford
Motor
was
among
Rivian’s
largest
stakeholders,
at
roughly
12%,
alongside
Amazon
when
Rivian
went
public
in
2021.
The
Detroit
automaker
exited
Rivian
in
2023 after
walking
back
a
plan
to
codevelop
EVs
with
the
company.
The
Volkswagen-Rivian
partnership
comes
as
automakers
shift
strategies
amid
slower-than-expected
adoption
of
EVs.
Pietro
Zollino,
head
of
VW
corporate
communications,
said
the
deal
with
Rivian
does
not
change
the
German
automaker’s
plans
to
build
a
$2
billion
EV
plant
for
its
announced
Scout
Motors
trucks
and
SUVs
in
South
Carolina.
“Our
commitment
towards
Scout
has
not
changed
at
all,”
he
said
in
an
email
Tuesday
night.
Rivian
has
been
on
a
cost-cutting
mission
for
months.
It
has
trimmed
staff,
retooled
its
Illinois
plant
to
increase
efficiencies
and
paused
construction
of
a
new
multibillion-dollar
factory
in
Georgia.
That
last
measure
is
expected
to
save
more
than
$2.25
billion
in
capital
spending,
including
the
impact
of
starting
production
of
Rivian’s
upcoming,
less
expensive
R2
vehicles
at
its
plant
in
Illinois
instead
of
Georgia
during
the
first
half
of
2026.
McDonough
said
Volkswagen’s
investment
is
expected
to
carry
the
company
through
the
ramp-up
of
its
new,
less
expensive
R2
vehicles
in
Illinois
as
well
as
the
midsize
EV
platform
at
its
plant
in
Georgia.
The
EV
maker
reported
a
loss
of
$1.45
billion
during
the
first
quarter
of
this
year,
as
it
retooled
its
plant
in
Normal,
Illinois,
to
launch
updated
versions
of
its
R1T
pickup
and
R1S
SUV
EVs
ahead
of
its
next-generation
vehicles
in
2026.
Rivian
reported
$7.86
billion
in
cash,
cash
equivalents
and
short-term
investments
to
end
March,
with
more
than
$9
billion
in
total
liquidity.
