Workers assemble second-generation R1 vehicles at electric vehicle manufacturer Rivian’s manufacturing plant in Normal, Illinois, on June 21, 2024.
Joel Angel Juarez | Reuters
Volkswagen Plans to invest up to $5 billion in electric vehicle startups Rivianwith an initial investment of US$1 billion.
An additional $4 billion is expected to be invested by 2026. issued by the car manufacturer Tuesday.
Rivian shares soared about 40% in after-hours trading on Tuesday, two days before a Rivian investor event as the company comes under pressure from Wall Street over cash burn and heavy losses. Rivian shares closed at $11.96 per share on Tuesday, down about 49% in 2024.
Volkswagen’s initial $1 billion will be provided in the form of convertible notes that can be converted into Rivian stock on or after December 1, the news release said.
Rivian will host investor conference call Discuss the partnership on Tuesday at 6 p.m. ET.
Volkswagen is now the second traditional automaker to take a stake in the Californian company. Ford Is one of Rivian’s largest stakeholders, accounting for approximately 12% Amazon Rivian will be available in 2021.
Volkswagen’s partnership with Rivian comes as the automaker changes strategy amid slower-than-expected adoption of electric vehicles. It’s unclear what impact, if any, the deal will have on Volkswagen’s plan to build a $2 billion electric vehicle factory in South Carolina for its new Scout Motors trucks and SUVs.
Rivian has been on a cost-cutting mission for months. The company has laid off workers, reorganized its Illinois factory to improve efficiency and paused construction of a new multibillion-dollar plant in Georgia. The final measure is expected to save more than $2.25 billion in capital expenditures, including the impact of starting production of Rivian’s next-generation R2 vehicle at the Illinois plant.
The electric vehicle maker reported a first-quarter loss of $1.45 billion as it retools its Normal, Ill., plant to roll out updated versions of its R1T pickup truck and R1S SUV electric vehicles ahead of the launch of next-generation vehicles in 2026. .
Rivian reported $7.86 billion in cash, cash equivalents and short-term investments as of the end of March, with total liquidity of more than $9 billion.
This is a development story. Please check back for additional updates.
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