- Car Dealership Guy News
- Posts
- Volkswagen ramps up Rivian investment to $5.8B — if the EV startup delivers
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.
Become an automotive insider in just 5 minutes.
Get the weekly email that delivers transparent insights into the car market.
Join 84,000 others now, it's free:
In today's automotive landscape, car buyers invest more time than ever in researching, considering, and comparing options. But for dealers, the challenge lies in pinpointing the audience ready to make a purchase.
Enter Premier by Edmunds.
Premier offers dealers a groundbreaking way to connect with in-market car shoppers precisely when, where, and how they prefer. With over 20 million monthly visits, Edmunds.com is the go-to destination for buyers seeking market insights, expert advice, and budget tools to make informed decisions.
Through Edmunds Premier, dealers gain access to this highly coveted audience. Simply list your new and used inventory on Edmunds, and watch as qualified, in-market traffic flows directly to your vehicle detail pages on your website.
Don't miss out on this opportunity to elevate your dealership's visibility and sales performance. You can sign up for Premier today at Edmunds.com/CDG.
Reply