Volkswagen Group and Rivian have announced a significant partnership that could reshape the electric vehicle (EV) landscape. Here are the key details of their deal:

1. Investment: Volkswagen has committed to investing up to $5 billion in Rivian[1][2][4]. This investment will be structured as follows:

• An initial $1 billion investment through an unsecured convertible note, which will convert to Rivian common stock upon regulatory approval[4][6].
• Additional investments of $1 billion in 2025 and another $1 billion in 2026[4].
• The remaining $2 billion will be split, with $1 billion invested directly in the joint venture and $1 billion available as a loan to the joint venture in 2026[4].

1. Joint Venture: The two companies will form a 50/50 joint venture focused on developing next-generation electrical architecture and software technology for EVs[2][6].
2. Technology Sharing: Rivian will contribute its electrical architecture expertise and license its intellectual property to the joint venture. Volkswagen will adapt Rivian’s current software and electrical architecture to its brands’ vehicles[4][6].
3. Timeline: The companies aim to launch vehicles using the jointly developed technology in the second half of this decade[4][6].
4. Benefits for Both Companies:

• For Rivian: This deal provides a crucial financial lifeline, as the company has yet to post a profit and has been facing challenges in scaling up production[1][4].
• For Volkswagen: The partnership is seen as a way to overcome issues with its own Cariad software division and accelerate its software-defined vehicle (SDV) plans[4][5].

1. Market Impact: Following the announcement, Rivian’s shares surged by 22-36% in after-hours trading, reflecting positive market sentiment towards the deal[2][5].
2. Strategic Implications: This partnership represents a significant shift in the EV industry, with a major traditional automaker investing heavily in a startup EV company. It highlights the growing importance of software and electrical architecture in the automotive industry[4][5].

The collaboration between Rivian and Volkswagen is expected to accelerate innovation in EV technology while helping both companies address their respective challenges in the rapidly evolving automotive market[5][6].

Citations:
[1] https://www.nytimes.com/2024/06/25/business/volkswagen-rivian-vw-investment.html
[2] https://www.reuters.com/business/autos-transportation/volkswagen-invest-up-5-billion-rivian-part-tech-joint-venture-2024-06-25/
[3] https://www.thestreet.com/investing/stocks/rivian-stock-soars-as-analysts-laud-game-changer-volkswagen-deal
[4] https://www.motortrend.com/news/volkswagen-rivian-5-billion-software-joint-venture-investment/
[5] https://www.theguardian.com/business/article/2024/jun/25/rivian-shares-increase-volkswagen-investment
[6] https://rivian.com/newsroom/article/rivian-and-volkswagen-group-announce-plans-for-joint-venture
[7] https://www.cnbc.com/2024/06/25/volkswagen-rivian-stake.html
[8] https://www.morningstar.com/news/marketwatch/20240626274/rivians-vw-partnership-seen-as-game-changer-for-the-companys-prospects
[9] https://www.investors.com/news/rivian-stock-volkswagen-partnership-will-it-work/
[10] https://riviantrackr.com/news/rivian-and-volkswagen-group-announce-transformative-joint-venture/
[11] https://www.marketwatch.com/story/rivians-vw-partnership-seen-as-game-changer-for-the-companys-prospects-7c4fd5ce
[12] https://abcnews.go.com/Business/volkswagen-rivian-partnership/story?id=111435119
[13] https://rivian.com/sv-SE/newsroom/article/rivian-and-volkswagen-group-announce-plans-for-joint-venture
[14] https://jalopnik.com/volkswagen-and-rivian-will-work-together-on-evs-1851560982
[15] https://www.industryweek.com/leadership/companies-executives/news/55091428/vw-to-invest-5-billion-in-ev-maker-rivian-establishing-joint-venture
[16] https://www.morningstar.com/news/marketwatch/20240626284/rivians-vw-partnership-seen-as-game-changer-for-ev-makers-prospects
[17] https://www.roadandtrack.com/news/a61422551/volkswagen-rivian-deal/
[18] https://eandt.theiet.org/2024/06/26/volkswagen-and-rivian-sign-5bn-deal-share-electric-vehicle-architecture-and-software