Volkswagen Group (VW) has expanded its partnership with U.S.-based electric vehicle (EV) maker Rivian, now valuing their joint venture at $5.8 billion, up from VW’s initial $5 billion commitment. Following the announcement, Rivian’s stock saw a notable 9% increase in after-hours trading.
This partnership allows VW and Rivian to share key technology, addressing a competitive EV market that faces slowing demand and increased competition from Chinese brands. The alliance will also secure funding for Rivian’s upcoming, more affordable R2 SUV, expected to launch next year, while allowing VW to incorporate Rivian’s technology in its own EV lineup by 2027.
In a joint statement, VW and Rivian highlighted the benefits of their collaboration in reducing costs and accelerating technology development. Initially, development teams from both companies will work together in California, with additional facilities planned in North America and Europe.
This partnership comes as VW, Europe’s largest automaker with brands like Audi, Porsche, and Lamborghini, considers cost-saving measures due to rising costs and declining sales. Rivian, meanwhile, has taken steps to optimize its own manufacturing processes and renegotiate supplier contracts amid a challenging EV market.