Volkswagen has increased its investment in U.S. electric vehicle maker Rivian by an additional $1 billion, after Rivian achieved two consecutive quarters of gross profit — a key milestone defined in the agreement between the companies.
The payment marks the second tranche of a potential $5.8 billion partnership announced in 2024, which includes $3.5 billion for equity investment in Rivian and $2.3 billion allocated to a joint venture. The venture, Rivian Volkswagen Technologies, is aimed at developing electric vehicle (EV) software and electronics architecture for both companies.
See also: Rivian’s R2 Platform to Become Backbone of Volkswagen EV Strategy
Volkswagen had previously acquired an 8.6% stake in Rivian following the initial $1 billion payment last year. The exact change in shareholding following the second investment has not been disclosed. According to terms in the agreement, Volkswagen paid a 33% premium over Rivian’s average share price between May 15 and June 27 for this latest tranche. The final share count has yet to be confirmed.
If Rivian continues to meet agreed targets, two additional investments — one in 2026 and another in 2027 — could follow, potentially making Volkswagen the largest single shareholder in Rivian, surpassing Amazon.
The collaboration is intended to provide Volkswagen access to Rivian’s electronics and software platforms, which are expected to address long-standing development challenges for the German automaker. The first Volkswagen vehicle to incorporate Rivian technology is planned for 2027, with the ID.1 compact EV expected to begin production in Portugal.
See also: Volkswagen’s ID. EVERY1 to Be First EV Featuring Rivian’s Software and Architecture
Rivian is expected to use the proceeds from the equity investments to fund the development of new, lower-cost EVs. These include the R2, already unveiled, and the upcoming R3. Although Rivian has not yet turned an annual profit, the new funding is expected to support the company’s liquidity and help reduce its projected adjusted EBITDA loss of between $1.7 billion and $1.9 billion for 2025.
The next tranche of investment in 2026 will be contingent on meeting technical milestones, while the final $500 million payment in 2027 will depend on the series production launch of the first Volkswagen model using Rivian’s platform.
Source: wiwo.de