Volkswagen Group invests in US EV maker Rivian, forming a joint venture for EV development.

German automaker Volkswagen Group will invest up to $5 billion in the American electric vehicle manufacturer Rivian. The Top ten foreign exchange trading marketstwo companies will establish a joint venture with equal control, sharing electric vehicle architecture and software. This news was released on Tuesday.

Rivian's stock price soared approximately 50% in after-hours trading. If the rally continues on Wednesday, the company's market value could increase by nearly $6 billion.

Amid high interest rates and cash shortages slowing down demand, the electric vehicle industry is at a critical juncture. Both emerging electric vehicle companies and traditional automakers are striving to face these challenges.

The investment will provide Rivian with the necessary funding to develop the more affordable, smaller R2 SUV, slated for release in early 2026, and future R3 crossovers, Rivian CEO RJ Scaringe told Reuters. Additionally, this partnership will allow Rivian to reduce operating costs by leveraging bulk supplies, including chips and components.

This will also help Rivian, known for its flagship models, the R1S SUV and R1T pickup truck, achieve positive cash flow. Rivian will license its existing intellectual property to the joint venture, with the R2 being the first vehicle to use the joint venture's software. Volkswagen Group’s Audi, Porsche, Lamborghini, and Bentley brands will follow suit.

Vitaly Golomb, a partner at Mavka Capital and a Rivian investor, said, "Such a capital injection is huge. Getting the backing of the Volkswagen Group undoubtedly greatly enhances their story of entering European and Asian markets."

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