VW increased its planned investment for a joint venture with EV startup Rivian to $5.8 billion as the companies have broader aspirations than initially announced for the operations.
Investors were impressed with the details of the deal, sending shares of Rivian up nearly 20% in early Wednesday trading., while giving Rivian a needed influx of capital as well as the potential for new opportunities for future revenue and income growth.
Rivian is set to receive $1.3 billion in cash this week following the close of the deal and formation of the joint venture, including"consideration for background licenses and a 50% equity stake in the joint venture."Rivian will receive $1 billion of investment in the form of equity at a 33% premium to the 30-day VWAP at the time of issuance if it reaches either two non-consecutive quarters of $50 million of gross profit or two consecutive quarters of gross profit.