Volkswagen ramps up Rivian investment to $5.8B — if the EV startup delivers

With EV startup volatility high, VW’s strategic investment gives Rivian a stronger foothold. (3 min. read)

(Left to right) Oliver Blume, Carsten Helbing, Wassym Bensaid, and RJ Scaringe via Rivian

Volkswagen Group has announced that it plans to increase its investment in Rivian if the EV startup meets certain benchmarks over the next three years.

Digging in: Under the deal, VW will now invest a total of $5.8 billion into the EV startup with four key benchmarks, including the $1 million that has already been invested and another $1.3 billion this week.

  • In 2025, Rivian will receive $1 billion in the form of equity if it posts either two nonconsecutive quarters of $50 million of gross profits or two consecutive quarters of any gross profit.  

  • In 2026, the EV startup will receive $1 billion more of equity if it successfully tests the joint venture’s technology in one or more vehicles. Rivian will also be able to draw a $1 billion loan in 2026, which would be backed by its equity stake in the joint venture. 

  • In 2027, Rivian also stands to receive $460 million for producing the first saleable VW vehicle featuring the joint venture’s technology.

Looking ahead: The Volkswagen and Rivian agreement includes several other key funding elements through 2028 and beginning in 2029. 

  • Through 2028, VW will put up 75% of the funding for the shared platform costs for the joint venture, with Rivan funding 25%.

  • Beginning in 2029, VW will fund an incremental $100 million per year of the joint venture’s shared costs, reducing Rivian’s shared costs in the partnership.  

  • Rivian also expects to save costs on materials by sourcing shared parts such as electronic control units from suppliers. 

Why it matters: Given the current volatile state of the EV sector (especially for startups), VW’s bigger investment strategy with Rivian (with established benchmarks) provides the EV startup with more solid footing in the market. 

The move also gives Rivan investors more reassurance that VW is committed to its partnership with Rivian, given some earlier concerns that the German automaker’s decision to relaunch Scout would impact the joint venture.

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