Electric carmaker Rivian is getting a jolt from Volkswagen, which announced it will make a $5 billion investment in the company over the next two years.
The two parties are expecting this joint venture to be complete by the fourth quarter of 2024, though any transactions in this are subject to definitive agreements, according to a press release.
“Not only is this partnership expected to bring our software and associated zonal architecture to an even broader market through Volkswagen Group’s global reach, but this partnership also is expected to help secure our capital needs for substantial growth,” Rivian founder and CEO RJ Scaringe said. “Rivian was created to help the world to transition away from fossil fuels through compelling products and services, and this partnership is beautifully aligned with that mission.”
Rivian’s shares have spiked in the wake of this announcement, going from $11.76 at 11 a.m. on Tuesday to $15.53 at the same time on Wednesday.
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Volkswagen’s investment in Rivian comes after some experts have warned that profitability among electric vehicles could take another four or five years to reach. Automakers besides Tesla, the most well-known electric carmaker, are also facing rising costs to build their electric vehicles.
The American Automobile Association annual consumer survey released earlier this month stated that 63% of adults said they would be unlikely or very unlikely to purchase a fully electric vehicle, up by 10% from last year. Only 18% said they would be likely or very likely to purchase an electric vehicle, down from 23% last year.
