The Volkswagen Group 
VOW has its stake in Rivian 
RIVN increased 16% to $5.8 billion, the two automakers said Tuesday after launching their planned joint venture to develop architecture and software for electric vehicles.
Shares of the US electric vehicle maker, valued at over $11 billion, rose nearly 9% in extended trading on Tuesday.
The companies said in June that VW would invest $5 billion (link) in Rivian – a lifeline for the loss-making EV startup as it prepares to launch a smaller, cheaper SUV called the R2 amid high borrowing costs and slowing EV demand to bring to market.
) “This partnership and this deal provides us with the capital to ensure that we can bring Rivian not only through the launch of R2 at Normal, but also through (ensuring) the launch and growth of R2 in our Georgia facility and through cash flow positive for us as a company,” Rivian CEO RJ Scaringe told reporters.
The R2, the first vehicle with the new architecture, will be manufactured at the Normal, Illinois factory. The company has delayed construction of its Georgia plant and last month applied for a federal loan (link) to begin construction of the plant.
The new vehicles from VW subsidiary Scout Motors will also be among the first to use the new architecture.
The joint venture, called Rivian and VW Group Technology LLC, aims to integrate Rivian’s advanced electrical infrastructure and software technology for both companies’ future electric vehicles, across all relevant vehicle segments, including small cars, the companies said.
Volkswagen plans to invest the $5.8 billion in Rivian and the joint venture through 2027, including an initial $1 billion convertible note.
Audi’s parent company will invest $1.3 billion in intellectual property licenses and an equity investment, as well as up to $3.5 billion in future equity, bonds and debt, all tied to specific milestones.
The joint venture could help ease the German automaker’s problems with its own software unit Cariad, which has been plagued by delays and losses since its inception, analysts said.
The German car maker recently asked employees to take a 10% pay cut (link), saying it was the only way to preserve jobs and remain competitive after profits collapsed and union bosses threatened strikes.
Rivian’s chief software officer, Wassym Bensaid, and VW Group’s technical director, Carsten Helbing, will lead the joint venture.
The joint venture’s developers and engineers will initially be based in Palo Alto, California; three further locations are being planned.
The joint venture will use Rivian’s existing technology to bring the R2 to market in the first half of 2026 and possibly present the first Volkswagen Group models as early as 2027.
