Another 800 million added! Volkswagen will "spend lavishly" 5.8 billion dollars to advance its cooperation plan with Rivian
Volkswagen announced that it will invest an additional $800 million in Rivian to advance their joint plan for developing battery-powered vehicles. Previously, Volkswagen had planned to invest $5 billion. The two companies have appointed leaders for the joint venture and showcased electric vehicle prototypes, despite weak global demand for electric vehicles. Rivian's stock price rose 8.32% in after-hours trading. The joint venture will be jointly led by executives from Rivian and Volkswagen, with the goal of launching new models by 2027
According to Zhitong Finance APP, on Tuesday, Volkswagen announced an additional investment of $800 million in its plan to jointly develop battery-powered vehicles with Rivian (RIVN.US). In June of this year, Volkswagen had stated that it expected to invest $5 billion in Rivian. Additionally, Volkswagen and Rivian appointed leaders for their joint venture, valued at several billion dollars, and showcased a prototype electric vehicle, reaffirming their commitment despite weak global electric vehicle demand and the incoming Trump administration threatening to cut support policies.
This financial lifeline may alleviate concerns about Rivian's cash burn and enable the German automaker to acquire software technology from its American partner, an area where Volkswagen has struggled.
As of the time of writing, Rivian's stock price rose 8.32% in after-hours trading to $11.46. The stock fell 4.17% during regular trading hours on Tuesday.
In a joint statement, the two companies announced that the joint venture between Rivian and the Volkswagen Group will be co-led by Rivian's Chief Software Officer Wassym Bensaid and Volkswagen's Chief Technology Officer Carsten Helbing. The two co-CEOs will lead a dedicated team of approximately 1,000 engineers from both companies.
Bensaid stated in an interview at Rivian's Palo Alto office, "This is an acceleration of our future plans." It is reported that Volkswagen aims to launch vehicles fine-tuned by the joint venture's technology by 2027. The two companies also plan to develop a new software-defined vehicle with more advanced technology, ultimately licensing it to other automakers.
The prototype showcased in Palo Alto integrates Rivian's software-based vehicle architecture into an unmarked Volkswagen test vehicle, with Bensaid noting that the joint venture's engineers completed the installation in 12 weeks.
Helbing will also serve as the Chief Operating Officer of the joint venture, stating that this technology can be easily applied to Volkswagen's commercial vehicles at a similar pace. He added that collaborating with a smaller, more agile partner like Rivian is an added benefit that accelerates decision-making and development time.
Helbing remarked in an interview, "What impresses us is the speed and pace of implementation," adding, "The goal is to maintain that pace."
Bensaid indicated that Rivian views the joint venture as a way to leverage the economies of scale enjoyed by its larger partner to enhance cost savings, thereby improving its own vehicle profit margins. He noted that Volkswagen's new Scout brand also plans to utilize technology from the Rivian-VW joint venture