Germany's Volkswagen to increase stake in US electric carmaker Rivian
WOLFSBURG, GERMANY (dpa)
German car giant Volkswagen is set to increase its stake in electric vehicle maker Rivian with a planned second payment of $1 billion due this Monday, after the US-based company recently achieved key financial targets in early May.
The payment will increase Volkswagen's stake in the company, which stands at 8.6% after an initial $1 billion investment last year.
The cash injections are part of a broader cooperation agreement under which Volkswagen has pledged up to $5.8 billion to Rivian.
This strategic investment gives Volkswagen access to Rivian's advanced electric vehicle (EV) architecture - technology the German carmaker hopes will help resolve persistent software development challenges that have delayed its own EV launches in the past.
Rivian, founded in 2009, has faced financial difficulties in recent years but has now reported gross profits for two quarters in a row.
This allowed Volkswagen to release the latest $1 billion payment.
However, Rivian still recorded a net loss of $541 million in the last quarter, though this was much lower than the $1.445 billion loss previously reported.
Future payments from Volkswagen will depend on the achievement of additional technological milestones, with the next $1 billion trance scheduled for mid-2026 and a final $500 million expected in 2027 when Volkswagen plans to launch its first vehicle featuring Rivian's technology.
Of Volkswagen's total $5.8 billion commitment, $3.5 billion is earmarked for acquiring Rivian shares, which could eventually make Volkswagen the company's largest shareholder, surpassing current majority stakeholder Amazon.
The remaining $2.3 billion will be invested in the joint venture Rivian Volkswagen Technologies, launched in late 2024. This venture will focus on developing a new electronic architecture and software platform for electric vehicles, which will be shared by both partners.
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