Workers assemble 2nd-generation R1 motor vehicles at electric powered automobile maker Rivian’s production facility in Normal, Illinois, U.S. June 21, 2024.
Joel Angel Juarez | Reuters
Volkswagen programs to spend up to $5 billion in electric powered automobile startup Rivian, setting up with an first investment of $1 billion.
The added $4 billion is anticipated to be invested subsequent the institution of a joint venture, according to joint releases by the automakers Tuesday.
Shares of Rivian soared additional than 30% through right after-several hours buying and selling Tuesday – two days ahead of an investor celebration for Rivian, which has been beneath tension from Wall Road due to its income burn off and important losses.
The cash from VW will be in the variety of a convertible take note, which could be converted to Rivian shares on or right after December 1.
Volkswagen is now the next legacy automaker to get a stake in the California-based mostly firm. Ford Motor was amongst Rivian’s major stakeholders, at roughly 12%, together with Amazon when Rivian went general public in 2021. The Detroit automaker bought a the greater part of its Rivian shares by 2023 after strolling back again a strategy to codevelop EVs with the firm.
Rivian claimed a reduction of $1.45 billion for the duration of the to start with quarter of this year, as it retooled its plant in Standard, Illinois, to launch up-to-date variations of its R1T pickup and R1S SUV EVs forward of its next-era automobiles in 2026.
The business has been on a cost-slicing mission for months. It has trimmed staff members, retooled its Illinois plant to improve efficiencies and paused building of a new multibillion-dollar factory in Ga. That previous evaluate is anticipated to preserve more than $2.25 billion in capital paying, which includes the effects of setting up generation of Rivian’s next-technology R2 car or truck at its plant in Illinois.
Rivian documented $7.86 billion in money, hard cash equivalents and short-time period investments to conclude March, with far more than $9 billion in overall liquidity.
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