Volkswagen Group announced a $1 billion investment in electric vehicle startup Rivian, with the potential to expand to as much as $5 billion. The partnership will see the two companies work together to develop and grow technology through a 50-50 joint venture.
Under the deal, Rivian will share its electrical architecture expertise with VW and license its existing intellectual property rights to the joint venture. The arrangement will give Volkswagen access to Rivian’s software platform and electrical architecture, which could be integrated into VW’s own vehicles, including brands like Porsche and Audi, as well as the company’s own electric vehicle upstart, Scout Motors.
Volkswagen will initially invest $1 billion in Rivian via an unsecured convertible note, which will convert into Rivian’s common stock once regulatory approvals are received. The German auto giant will then invest an additional $1 billion in Rivian’s common stock in each of 2025 and 2026, with the remaining $2 billion going to the joint venture.
The partnership marks a significant development for Volkswagen, which has struggled to advance its software capabilities in the mass transition to electric vehicles. Rivian’s electrical architecture and software platform could provide VW with a critical boost in this area.
Rivian CEO RJ Scaringe described the partnership as a “once-in-a-lifetime opportunity” and praised the company’s shared values and interests. Volkswagen Group CEO Oliver Blume echoed this sentiment, noting that there was an immediate feeling of shared purpose and vision between the two companies.
The partnership also comes as Rivian continues to develop its mass-market R2 SUV and ramps up production of its next-generation R1T pickup truck and R1S SUV. The company’s shares surged more than 36% in after-hours trading following the announcement.
