Photo provided by Volkswagen Group CEO Oliver Blume and Rivian founder and CEO RJ Scaringe. The two companies announced their joint venture plan on June 25, 2024.
Courtesy: Business Wire
Volkswagen Group Increases planned investment in announced joint ventures with electric vehicle manufacturers Rivian Cars before the operation launches on Wednesday.
The company is in a joint press release The deal is currently worth $5.8 billion, up from an initial investment of up to $5 billion, and the first Volkswagen models using Rivian’s software and electrical architecture will be available as early as 2027, it said on Tuesday.
Rivian shares rose more than 6% in after-hours trading.
Officials said on an investor call on Tuesday that the increased investment was due to the companies’ early access to some potential future capital from Volkswagen, as well as changes to the deal structure that included an equity investment.
The German automaker expects to use Rivian’s technology across a variety of price points, international markets and brands, Volkswagen Group Chief Executive Oliver Blume said at a news conference on Tuesday.
Blume said the integration of Rivian software is expected to start with the Volkswagen brand, followed by Audi and VW’s upcoming Scout brand. He also mentioned that “sports cars” could be included, but did not specify what brand. Volkswagen’s brands also include Bentley, Porsche and Lamborghini.
“We are pleased to see our technology being integrated into vehicles beyond Rivian, and we are excited about the future,” Rivian CEO RJ Scaringe said in a statement.
Both Scaringer and Blum said any further plans, such as battery modules, joint production of vehicles or sharing of other hardware components, would need to be outside the announced joint venture agreement.
The joint venture, called “Rivian and VW Group Technology, LLC,” is expected to close in the fourth quarter.
Rivian Auto and Volkswagen Group shares
Volkswagen has made an initial investment of $1 billion in the form of convertible notes, the companies said. At the end of the joint venture, Volkswagen will invest approximately US$1.3 billion “as consideration for the background intellectual property license and 50% equity interest in the joint venture.”
The companies said they expect remaining investment to reach $3.5 billion by 2027 “in the form of equity, convertible notes and future debt and based on clearly defined milestones.”
The joint venture transaction is Originally announced in Juneat the same time, Rivian seeks to raise additional funds to launch redesigned models and prepare to produce new “R2” vehicles in early 2026.
Scaringer previously said Volkswagen’s funding was expected to ramp up production of the small R2 SUV starting in 2026 at a plant in Normal, Illinois, and build a midsize electric vehicle platform at a plant in Georgia where Rivian suspended construction earlier this year.
The joint venture will be led by Rivian Chief Software Officer Wassym Bensaid and Volkswagen Group Chief Technical Engineer Carsten Helbing.
Developers and software engineers from both companies will join the joint venture, the companies said. The team will initially be based in Palo Alto, California, with three other sites in North America and Europe under development.
About The Author
