Finance

Volkswagen to Invest $5 Billion in Rivian in Major EV Deal

Jun 25, 2024 1 min read

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Volkswagen Group has announced a substantial investment in Rivian Automotive, committing up to $5 billion to form an equally controlled joint venture aimed at advancing electric vehicle (EV) technology. The partnership will focus on developing next-generation electrical architecture and software for EVs, leveraging Rivian's intellectual property and expertise. This initiative aligns with Volkswagen's strategy to accelerate the development of software-defined vehicles (SDVs) and to overcome challenges faced by traditional automakers in producing battery-powered vehicles with advanced software.

The initial investment includes a $1 billion unsecured convertible note from Volkswagen, which will convert into Rivian’s common stock subject to regulatory approvals and certain conditions by December 2024. The joint venture plans to scale this investment to $4 billion over time, with the goal of reducing costs per vehicle and increasing innovation. Following the announcement, Rivian's shares saw a significant increase, closing 8.63% higher. Both companies aim to release vehicles utilizing the newly developed technology in the latter half of the decade.

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