Volkswagen Raises Investment in Rivian to $5.8 Billion

Volkswagen Investment in Rivian: Volkswagen Group raised its investment in Rivian by 16 per cent to $5.8 billion, two automakers said on Tuesday, as companies kick off ir planned joint venture to develop electric vehicle architecture and software.

Shares in US EV maker, valued at over $11 billion, rose nearly 9 per cent in extended tring on Tuesday.

companies said in June that VW would invest $5 billion in Rivian - a lifeline for loss-making EV startup that is gearing up to roll out a smaller, cheaper SUV called R2 amid high borrowing costs and slowing EV demand.

"This partnership and this deal secures capital for us to ensure that we can't only take Rivian through launch of R2 at Normal, but secures launch of and growth of R2 in our Georgia facility and through (to being) cash flow positive for us as a business," Rivian CEO RJ Scaringe told reporters.

R2, first vehicle to use new architecture, will be me at its factory in Normal, Illinois. company has delayed construction of its plant in Georgia, applying for a federal loan last month to start building factory.

New vehicles from VW unit Scout Motors vehicles will also be among first to use new architecture.

joint venture - named Rivian and VW Group Technology LLC- aims to integrate vanced electrical infrastructure and Rivian's software technology for future EVs of both companies, across all relevant vehicle segments, including subcompact cars, firms said.

Volkswagen plans to invest $5.8 billion in Rivian and joint venture by 2027, including an initial $1 billion convertible note.

Audi-parent will invest $1.3 billion for intellectual property licenses and an equity stake and up to $3.5 billion in future equity, notes and debt, all tied to specific milestones.

joint venture could help ease German automaker's problems with its own software unit, Cari, which has been plagued by delays and losses since its inception, analysts have said.

German automaker recently asked its workers to take a 10 per cent pay cut, saying it was only way company could save jobs and remain competitive, after profits plunged and union bosses threatened strikes.

Rivian's Chief Software Officer Wassym Bensaid and VW Group's Chief Technical Engineer Carsten Helbing will le joint venture .

Developers and engineers in JV will be based initially in Palo Alto, California with three ditional sites under development.

joint venture will use Rivian's existing tech to launch Rivian's R2 in first half of 2026 and potentially debut Volkswagen Group models as early as 2027.