Rivian Automotive Inc. Shares Surge After Volkswagen Investment

Shares of electric vehicle maker Rivian Automotive Inc (NASDAQ:RIVN) saw a significant increase in aftermarket trading on Tuesday, after Volkswagen AG (ETR:VOWG) announced an increase in its investment through a joint venture.

Rivian's stock rose by 8.4%, reaching $11.47 by 18:21 ET (23:21 GMT).

In a joint statement, Rivian and Volkswagen confirmed that the German automaker would invest $5.8 billion in the joint venture (JV), exceeding the previous commitment of $5 billion. The JV aims to launch electric vehicle (EV) models as early as 2027.

Volkswagen's investment includes:
– An initial $1 billion convertible note
– $1.3 billion for intellectual property and equity in the JV
– $3.5 billion to be allocated based on performance milestones

This collaboration will leverage Rivian’s software and electrical engineering across various vehicle lines, enhancing Volkswagen's transition into EV production.

The capital generated from the JV will facilitate the introduction of Rivian’s upcoming R2 model in the early half of 2026. The R2 is positioned as a smaller, more affordable SUV, crucial for Rivian’s strategy amidst declining EV demand, rising production costs, and slowing sales.

Notably, Rivian's stock has depreciated by 50% this year, attributed to weak sales and moderate production issues.