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Shares of electric vehicle start-up Rivian surged in extended trading after Volkswagen announced a plan to invest up to $5bn as part of a partnership in electric vehicle software.
The tie-up plan comes as Volkswagen seeks to beef up its EV offering in the face of sophisticated competition from Tesla and Chinese rivals. Its in-house software developer, Cariad, has struggled to deliver products on time.
Upon agreement of the 50/50 joint venture, Volkswagen would receive “immediate access” to Rivian’s EV software for use in its own cars.
Rivian shares were up more than 40 per cent in after-hours trading on Tuesday following the announcement. At the closing bell, the stock had shed about half of its value so far this year.
“This partnership brings Rivian’s software and zonal electronics platform to a broader market through Volkswagen Group’s global reach and scale . . . as we bring R2 and our next generation of vehicles to market,” Rivian founder and chief executive RJ Scaringe said on Tuesday.
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