Volkswagen Group (VW) and electric vehicle (EV) maker Rivian have revealed a strategic joint venture worth $5.8 billion (£4.55 billion), increasing VW's initial investment. The collaboration aims to accelerate the development of electric vehicle technology as both companies face intensifying competition and slowing growth in the EV market.
Following the announcement, Rivian’s shares saw a 9% surge in after-hours trading. The joint venture offers a vital funding boost for Rivian, which has yet to achieve profitability. The company is preparing to launch its more affordable R2 SUV next year, and the collaboration will help it scale production.
For VW, the partnership provides an opportunity to integrate Rivian’s technology into its portfolio, with the first vehicles featuring Rivian’s innovations expected to arrive in 2027.
In a statement, both companies emphasized that their combined expertise would reduce development costs and speed up the deployment of new technologies. Initial collaborations will take place in California, with additional facilities set to open in North America and Europe.
The partnership comes as VW is expected to announce cost-cutting measures amid challenges including rising costs, falling sales, and increased competition from Chinese EV manufacturers. Rivian, meanwhile, has been taking steps to streamline its operations and renegotiate supplier contracts in response to weak EV demand.
Alongside its SUV offerings, Rivian produces electric delivery vans for Amazon, which has committed to purchasing 100,000 units by 2030.
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