Volkswagen announced last night that it would invest $1 billion in US electric vehicle manufacturer Rivian, with the possibility of injecting up to a further $4 billion into their joint projects between now and 2026.

The German automaker and the automotive technology company intend to create a joint venture dedicated to electronic/electrical (E/E) architectures, which will be equally owned by the two partners.

'We think this is a remarkable deal for Rivian, which will provide welcome liquidity', reacted RBC analysts.

The Nasdaq-listed Rivian Automotive share ended up by more than 8% last night.

'From VW's point of view, the transaction will provide valuable assistance in the software sector, where the group is currently experiencing difficulties, and will also enable it to gain exposure to the US SUV and pick-up market thanks to a significant stake in Rivian', adds RBC.

Volkswagen has, however, made it clear that the release of the four billion dollars to Rivian or to their joint venture is conditional on its success.

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