Connect with us

Hi, what are you looking for?

Stock

Rivian secures up to $5 billion from Volkswagen; shares soar 40%

Volkswagen plans to invest up to $5 billion in electric vehicle startup Rivian, starting with an initial investment of $1 billion.

The additional $4 billion is expected by 2026. It includes plans for $1 billion each in 2025 and 2026, followed by $2 billion in 2026 related to an expected joint venture to create electrical architecture and software technology, according to a release by the automakers Tuesday.

Shares of Rivian soared roughly 40% during after-hours trading Tuesday, two days ahead of an investor event for Rivian, which has been under pressure from Wall Street due to its cash burn and significant losses. Rivian stock closed Tuesday at $11.96 a share, down roughly 49% in 2024.

The initial $1 billion from Volkswagen will be in the form of a convertible note, which could be converted to Rivian shares on or after Dec. 1, the release said.

Rivian will host an investor call to discuss the tie-up at 6 p.m. ET Tuesday.

Volkswagen is now the second legacy automaker to take a stake in the California-based company. Ford Motor was among Rivian’s largest stakeholders, at roughly 12%, alongside Amazon when Rivian went public in 2021. The Detroit automaker exited Rivian in 2023 after walking back a plan to codevelop EVs with the company.

The Volkswagen-Rivian partnership comes as automakers shift strategies amid slower-than-expected adoption of EVs. It was not immediately clear what, if any, effect the deal will have on Volkswagen’s plans to build a $2 billion EV plant for its new Scout Motors trucks and SUVs in South Carolina.

Rivian has been on a cost-cutting mission for months. It has trimmed staff, retooled its Illinois plant to increase efficiencies and paused construction of a new multibillion-dollar factory in Georgia. That last measure is expected to save more than $2.25 billion in capital spending, including the impact of starting production of Rivian’s next-generation R2 vehicle at its plant in Illinois.

The EV maker reported a loss of $1.45 billion during the first quarter of this year, as it retooled its plant in Normal, Illinois, to launch updated versions of its R1T pickup and R1S SUV EVs ahead of its next-generation vehicles in 2026.

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

This post appeared first on NBC NEWS
Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.
    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    Latest News

    Former First Lady Melania Trump will ‘most certainly’ have an influence on who her husband selects as a running mate for the 2024 presidential...

    Economy

    Former U.N. ambassador Nikki Haley posted an online tribute on Sunday to her father, who she said died on Father’s Day. “This morning I...

    Latest News

    It’s hard to tell who needs who more.Former President Trump or House Speaker Mike Johnson, R-La.It’s too early to say if Mr. Trump will...

    Investing

    Maximizing Profits in Forex with the XMaster Formula Indicator Key Takeaways: XMaster Formula Indicator is a reliable and accurate tool for Forex traders to...