The German giant automaker Volkswagen will invest 5 billion dollars in the American manufacturer of electric cars Rivian.
The German car giant Volkswagen will invest 5 billion dollars in the American manufacturer of electric cars Rivian. The goal is to create a joint venture that will produce technologies used by both automakers.
Rivian shares rose 8.6% on June 25 and more than 40% in aftermarket trading after the deal was announced shortly after the end of the stock market session, AFP reported.
Although praised for its technology, Rivian is reporting losses and bleeding cash.
Under the deal, Volkswagen will make an initial investment of $1 billion in the US company in 2024, which will be converted into Rivian common stock, followed by further investments in 2025 and 2026.
"Today's announcement is expected to create a robust capital roadmap to support our future growth," Rivian said.
Volkswagen's investment will allow Rivian to finance investments to increase production at its Illinois plant and to develop a new plant in the state of Georgia.
Rivian will allow Volkswagen to use the American plant's electrical architecture.
"Through our cooperation, we will introduce the best solutions into our cars faster and at a lower cost," said Volkswagen CEO Oliver Blume.
"We are strengthening our technological profile and our competitiveness," Blume added.
The two companies expect the transaction to close in the fourth quarter of 2024, subject to regulatory approvals. | BGNES
