Volkswagen Group (VW) has deepened its partnership with electric vehicle (EV) maker Rivian, announcing a joint venture now valued at $5.8 billion (£4.55 billion). This marks an increase from VW’s initial commitment of $5 billion. Rivian’s shares surged by more than 9% in after-hours trading following the announcement.
The partnership will see both companies collaborate on developing critical EV technologies, as global demand for electric vehicles slows and competition intensifies, particularly from Chinese manufacturers. Rivian, which is still operating at a loss, will benefit from the much-needed funding as it prepares to launch its more affordable R2 model—a smaller SUV—next year. VW, in turn, will integrate Rivian’s technology into its own vehicle lineup, with the first models featuring Rivian’s innovations expected by 2027.
The joint venture aims to reduce development costs and accelerate the adoption of new technologies, combining the strengths of both companies. Developers and engineers from Rivian and VW will initially work together in California, with additional facilities set to open in North America and Europe. This collaboration comes at a time when VW is facing rising costs, weakening sales, and increased competition from Chinese EV manufacturers, all while shifting away from traditional combustion engines.
In a separate move, Rivian has been working to reduce costs, renegotiating supplier contracts and streamlining manufacturing processes to cope with softening EV demand. The company, which remains unprofitable, also supplies electric delivery vans to Amazon—its largest shareholder—under an order for 100,000 units, all of which are expected to be delivered by 2030.
