Rivian-Volkswagen joint venture up deal to up to $5.8 billion

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Rivian-Volkswagen ****** venture up deal to up to $5.8 billion

A provided image of Oliver Blume, CEO of Volkswagen Group and RJ Scaringe, founder and CEO of Rivian, as the companies announce ****** venture plans on June 25, 2024.

Courtesy: Business Wire

Volkswagen Group has increased its planned investment in an announced ****** venture with electric vehicle maker Rivian Automotive ahead of the operations launching Wednesday.

The companies in a

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Tuesday said the size of the deal is now up to $5.8 billion — an increase from an initial investment of up to $5 billion — with the first VW models to use Rivian’s software and electrical architecture arriving as early as 2027.

VW Group CEO Oliver Blume during a press conference Tuesday said the ******* automaker expects to use Rivian’s technologies across a wide range of price points, international markets and brands.

The integration of Rivian’s software is expected to start with the Volkswagen brand, followed by Audi as well as VW’s forthcoming Scout brand, Blume said. He also mentioned “sports cars” could be included but did not specify what brand. VW’s brands also include Bentley, Porsche and Lamborghini, among others.

“We’re thrilled to see our technology being integrated in vehicles outside of Rivian, and we’re excited for the future,” Rivian CEO RJ Scaringe said in a statement.

Both Scaringe and Blume said any further plans such as battery modules, ****** production of vehicles or sharing other hardware components would need to be in addition to the announced ****** venture deal.

The name of the ****** venture, which was expected to close during the fourth quarter, is “Rivian and VW Group Technology, LLC.”

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Stock of Rivian Automotive and Volkswagen Group

VW has already made an initial investment of $1 billion in the form of a convertible note, the companies said. At the closing of the ****** venture, VW will invest about $1.3 billion “as consideration for background IP licenses and a 50% equity stake in the ****** venture.”

The remaining investment of up to $3.5 billion is expected to come by 2027 “in the form of equity, convertible notes, and debt at future dates and based on clearly defined milestones,” according to the companies.

Officials did not specifically detail why there was an increase in VW’s investment to up to $5.8 billion.

The ****** venture deal was

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, and came as Rivian sought to raise additional capital as it launches its redesigned models and prepares for production of new “R2” vehicles in early 2026.

Scaringe previously said the capital from VW is expected to carry the company through the production ramp-up of its smaller R2 SUVs at its plant in Normal, Illinois, starting in 2026, as well as production of a midsize EV platform at a plant in Georgia, where Rivian paused construction earlier this year.

The ****** venture will be headed by Rivian Chief Software Officer Wassym Bensaid and VW Group Chief Technical Engineer Carsten Helbing.

The companies said developers and software engineers from both companies will join the ****** venture. Teams will be based in Palo Alto, California, initially, and three other sites are in development in North America and Europe.

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