A provided image of Oliver Blume, CEO of Volkswagen Group and RJ Scaringe, founder and CEO of Rivian, as the companies announce joint venture plans on June 25, 2024.
Courtesy: Business Wire
Rivian Automotive and Volkswagen Group have released details of their previously announced joint venture ahead of the operations launching Wednesday.
The companies in a joint press release Tuesday said the size of the deal is now up to $5.8 billion — an increase from an initial $5 billion — with the first VW models to use Rivian’s software and electrical architecture arriving as early as 2027.
The name of the joint venture, which was expected to close during the fourth quarter, is “Rivian and VW Group Technology, LLC.”
The deal was initially announced in June, and came as Rivian attempted to raise additional capital as it launches its redesigned models and prepares for production of new “R2” vehicles in early 2026.
Rivian CEO RJ Scaringe previously said the capital from VW is expected to carry the company through the production ramp-up of its smaller R2 SUVs at its plant in Normal, Illinois, starting in 2026, as well as production of a midsize EV platform at a plant in Georgia, where Rivian paused construction earlier this year.
VW has already made an initial investment of $1 billion in the form of a convertible note, the companies said. At the closing of the joint venture, VW will invest about $1.3 billion “as consideration for background IP licenses and a 50% equity stake in the joint venture.”
The remaining investment of up to $3.5 billion is expected to come by 2027 “in the form of equity, convertible notes, and debt at future dates and based on clearly defined milestones,” according to the companies.
Rivian did not immediately respond about why there was an increase in the size of the deal to up to $5.8 billion.
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