After receiving up to $5 billion from Volkswagen, Rivian’s shares increase by more than 50%

The Volkswagen Group intends to invest a maximum of $5 billion, beginning with a $1 billion initial investment, in the electric car company Rivian.

By 2026, the extra $4 billion is anticipated. According to an announcement from the automakers on Tuesday, it includes plans for $1 billion in 2025 and 2026, followed by $2 billion in 2026 for a projected joint venture to develop software and electrical architecture.

Shares of Rivian jumped more than 50% during after-hours trading Tuesday, two days ahead of an investor presentation for Rivian, which has been under pressure from Wall Street owing to its cash burn and substantial losses. Tuesday’s closing price for Rivian shares was $11.96 per share, a 49% decrease from 2024.

According to the release, the first $1 billion from Volkswagen will come in the form of a convertible note that may be exchanged for Rivian shares on or before December 1.

During an investor call on Tuesday night, Rivian CEO and founder RJ Scaringe stated that the deal will benefit the company in its quest to achieve cash flow positivity.

It was mentioned that the funds are anticipated to support the firm during the 2026 manufacturing ramp-up of the company’s smaller R2 SUVs at its Normal, Illinois facility, as well as the manufacture of the midsize EV platform at a Georgia plant where Rivian halted construction earlier this year.

According to Scaringe, Volkswagen plans to adopt Rivian’s electrical architecture and software stack for cars starting in the second part of the decade. According to him, nothing pertaining to battery technologies, vehicle propulsion platforms, high voltage systems, autonomy, or electrical hardware is included in the joint venture.

Rivian reported $7.86 billion in cash, cash equivalents and short-term investments to end March, with more than $9 billion in total liquidity.