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U.S. electric truck and SUV builder Rivian, which reportedly loses nearly $39,000 on every vehicle it sells, is getting a boost from German automaker Volkswagen. VW announced Tuesday that it will invest up to $5 billion in Rivian in an alliance “to create next-generation electrical architecture and best-in-class software technology,” according to a press release posted by Rivian.
The press release stated, “The partnership is anticipated to accelerate the development of software for Rivian and Volkswagen Group. It is expected to allow both companies to combine their complementary strengths and lower cost per vehicle by increasing scale and speeding up innovation globally.”
The hook-up is expected to both benefit the companies and address current weaknesses. A story by The New York Times reported, “It would provide Volkswagen with the software expertise that auto analysts say it sorely lacks. And Rivian, in addition to cash, would benefit from the manufacturing expertise of an automaker that cranks out nearly 10 million vehicles a year from factories around the world.
VW plans to initially invest $1 billion in Rivian with an additional investment of up to $4 billion more planned.
Rivians pickups and sport utility vehicles are produced at a factory in Normal, IL. They have been well received by the automotive press and customers. Rivian models start at $69,900, deliver 1,025 horsepower and can go from 0-60 miles per hour in under 2.5 seconds.
Reuters reported that shares in Rivian rose about 50 percent in extended trading after Tuesday’s announcement, boosting the company’s market value by nearly $6 billion.
(Photos of Rivian R3 courtesy of Rivian)
