Shares of Rivian surged about 50% in extended trade after the announcement, potentially supercharging the company's market value by nearly $6 billion, if gains hold today.
Moreover, the partnership will enable Rivian to cut operating costs by leveraging volumes of supplies including chips and components, he said.The company will license its existing intellectual property to the JV, and the R2 will be the first vehicle using software from the joint venture Volkswagen vehicles, including its Audi, Porsche, Lamborghini and Bentley brands, will follow.
VW's software division, Cariad - set up under former VW Group CEO Herbert Diess - has exceeded its budget and failed to meet goals. That contributed to Diess' exit in September 2022. Even with losses of nearly $40,000 for every vehicle it delivers, Rivian has been on a steadier footing than other EV startups that have been forced to slash prices or file for bankruptcy, including Fisker earlier this month.
Rivian's cash and short-term investments fell by about $1.5 billion in the first quarter to just under $8 billion. Before the VW deal, Rivian had said it had enough capital to launch the R2 SUVs. Volkswagen said earlier this year it was sticking with plans to launch 25 EV models in North America across its group brands by 2030, even as it acknowledged slowing growth in the segment.Mavka Capital's Golomb said VW is not a big player in the large SUV and pickup segments in the US and it has failed to break through with its crossover electric SUV ID4.