Electric vehicle maker Rivian is getting even more cash from German carmaker Volkswagen Group. The two companies are working together to advance EV technology through a joint venture is now worth $5.8 billion.
At the beginning of this year, Volkswagen has announced that it is investing $5 billion in a partnership with Rivian. However, according to a recent press releasethe deal was revised, with the Jetta-maker bringing another $800 million to the table.
Volkswagen’s investment includes $1.3 billion for intellectual property as well as a stake in Rivian. Another $3.5 billion will be for future equity, notes and debt. The other $1 billion investment is tied to convertible notes.
“The partnership with Rivian is the next logical step to strengthen our global competitive and technological position,” said Oliver Blume, CEO of Volkswagen Group.
The new company, called Rivian and Volkswagen Group Technologies, officially started on November 13. Developers and engineers from VW and Rivian will join forces to share knowledge and technology.
The group will work to advance Rivian’s electrical architecture and software, which will be integrated into some of Volkswagen’s 2027 models. The Audi brand will soon follow. The partnership will also help get Rivian’s second-generation R2 models launched in the first half of 2026.
“We are excited to see our technology integrated into vehicles outside of Rivian, and we are excited for the future,” said Rivian CEO RJ Scaringe.
Rivian and Volkswagen need this joint venture
The cash injection could not have come at a better time for Rivian. The EV maker has been cutting costs as it struggles to turn a profit. Additionally, recent supplier issues are hurting the development and production of its next-generation EVs, including the lower-priced R2 model.
In the previous three-month quarter, Rivian reported a gross profit loss of $392 million. For the year, the company predicts an adjusted earnings loss of between $2.83 billion and $2.88 billion. Annual production of EVs will fall between 47,000 and 49,000 units, about 10,000 less than previous estimates.
Volkswagen has been up against its problems lately. Last month, he made the difficult decision closed three factories in its home country of Germany. The closures also include cutting thousands of jobs.
VW said the closings and layoffs are part of a necessary plan to reorganize and slow the erosion of its market share. Increased competition from China and a lack of demand for Volkswagen models in Europe have undermined the company’s bottom line.