Rivian Shares Surge On $5.8 Billion, Volkswagen investment in Joint Venture

Shares of Rivian: Shares of Rivian jumped over 15 per cent on Wednesday after electric vehicle maker announced a $5.8 billion investment from German automaker Volkswagen as part of ir joint venture.

investment boost comes at a crucial time for Rivian, which aims to cut costs, achieve profitability, and launch its smaller, more affordable R2 SUV to attract budget-conscious consumers.

joint venture, Rivian and VW Group Technology LLC will integrate vanced electrical infrastructure and Rivian's software technology for both companies' future electric vehicles.

"It ( investment) is a vote of confidence in EV maker's prospects, as support for EVs in US faces a more uncertain future, given Trump is returning to White House," said Susannah Streeter, he of money and markets at Hargreaves Lansdown.

"Tesla's Elon Musk has been given a seat at Trump's top table," Streeter ded, which could potentially put EV rivals like Rivian in a less favorable position in future policy decisions.

Following Trump's declaration of victory last week, shares of Rivian and or electric vehicle manufacturers went down, with Tesla being only outlier.

Last week, Rivian fell short of third-quarter revenue estimates. Amazon -backed company has been struggling with a parts shortage, which led to a reduction in its annual production forecast in October.

Rivian still faces daunting challenges like a lack of scale, increasing competition, high capital costs and "assumed elimination" of EV tax credits, said Garrett Nelson, senior equity analyst at CFRA Research

joint venture helps alleviate "a significant chunk of capital concern" and likely establish Rivian and Volkswagen venture as platform of choice in Western world apart from Tesla, said Canaccord Genuity analysts in a note.

Rivian's shares have fallen nearly 55 per cent this year, underperforming rivals. If gains hold, company is set to d over $1.6 billion to its current market value of $10.8 billion.