As Volkswagen boosts its joint venture investment, Rivian rises more than 8%

Shares of electric vehicle manufacturer Rivian Automotive Inc (NASDAQ) surged in after-hours trading on Tuesday following an announcement that automotive giant Volkswagen (ETR) had increased its investment in Rivian through a joint venture.

Rivian's stock rose by 8.4% to $11.47 as of 18:21 ET (23:21 GMT).

In a joint statement, Rivian and Volkswagen AG (ETR) revealed that the German automaker will boost its investment in their partnership to $5.8 billion, surpassing an earlier commitment of $5 billion. The joint venture aims to start rolling out electric vehicle models as early as 2027.

Volkswagen's total investment of up to $5.8 billion in Rivian and the JV will include an initial $1 billion convertible note, $1.3 billion allocated for intellectual property, and an equity stake in the venture. The remaining $3.5 billion will be provided in the form of equity, convertible notes, and debt contingent on reaching specific performance milestones.

The German automaker plans to integrate Rivian's software and electrical engineering expertise into a broad range of vehicles, further strengthening its push into the electric vehicle market.

Funds from the joint venture will facilitate the launch of Rivian's upcoming R2 model in the first half of 2026. The R2, a smaller and more affordable SUV, is considered crucial for Rivian's growth as it navigates challenges such as declining demand for EVs, high production expenses, and slowing sales.

Rivian's stock value has fallen by half this year due to weak sales figures and mediocre production performance.

 

 

 

 

 

 

 

 

 

Paraphrasing text from "Investing" all rights reserved by the original author.