For the longest time, Volkswagen has been on the back foot in the electric car revolution and their recent plans to invest as much as $5 billion in an electric vehicle maker may be seen as an attempt to get back in the race.
On Tuesday the 25th of June 2024, German automotive giant Volkswagen and electric vehicle maker Rivian announced that Volkswagen will be investing 5 billion dollars in the company in the following years after an initial investment of 1 billion dollars. Naturally, such positive news has seen Rivian stocks go up as much as 30% in the extended stock markets on Wednesday morning.
Rivian, an American electric vehicle manufacturer and automotive technology and outdoor recreation company founded in 2009 is valued at $15.2b even though it hasn’t rolled out any vehicles yet with its all-electric R1T truck set to be released in 2025, and then its R1S all-electric electric vehicle to follow right after.
While for some, this is Volkswagen’s admittance of being behind in the electric motor space, for others this is a positive sign for Volkswagen as it will strengthen their market share in the long run.
Further investments of $1b are expected in 2025 and 2026 respectively. RJ Scaringe, Founder and CEO of Rivian’s message to the public said:
“We’re very excited to be partnering with Volkswagen Group. Since the earliest days of Rivian, we have been focused on developing highly differentiated technology, and it’s exciting that one of the world’s largest and most respected automotive companies has recognized this. Not only is this partnership expected to bring our software and associated zonal architecture to an even broader market through Volkswagen Group’s global reach, but this partnership also is expected to help secure our capital needs for substantial growth. Rivian was created to help the world transition away from fossil fuels through compelling products and services, and this partnership is beautifully aligned with that mission.”
