By DCB Editorial, November 13, 2024
Volkswagen Group has boosted its investment in Rivian Automotive by 16% to $5.8 billion, aiming to drive forward their joint venture focused on electric vehicle (EV) architecture and software development. This investment caused Rivian’s shares to jump by nearly 9% in after-hours trading.
Initially investing $5 billion in June, Volkswagen’s increased funding comes as Rivian, which has faced financial losses, prepares to launch its R2 SUV, a smaller, more affordable model. The investment will support R2 production at Rivian’s Illinois factory and future growth at a planned Georgia facility, moving the company closer to cash flow positivity.
The R2, Rivian’s first vehicle using the new EV architecture, will be produced in Illinois, with Georgia plant construction delayed pending a federal loan. The venture allows Volkswagen to leverage Rivian’s technology in future models, anticipated for market release by 2027, and could address issues within Volkswagen’s Cariad software division, which has faced setbacks.
The joint venture will be led by Rivian’s Chief Software Officer Wassym Bensaid and Volkswagen’s Chief Technical Engineer Carsten Helbing. Initial collaboration will occur in Palo Alto, California, with plans to expand to three more locations. The partnership not only accelerates Rivian’s R2 launch for early 2026 but also prepares for Volkswagen-branded EVs as soon as 2027.
