Volkswagen plans to invest up to $5 billion in electric vehicle EV-Maker Rivian.

With an initial $1 billion coming through a Convertible Promissory Note Purchase Agreement, pending approval from Volkswagen’s Supervisory Board.This agreement will determine Volkswagen’s stake in Rivian based on the average share prices at the time of the agreement and at the conversion date.

(Image: EV inFocus)

Volkswagen and Rivian also aim to create a joint venture to develop next-generation electrical/electronic (E/E) architecture for EV’s. Each company will hold a 50% stake, sharing control of the venture. This partnership will allow Volkswagen to leverage Rivian’s E/E architecture for its own electric vehicles. However, the joint venture will only move forward after technical reviews, ongoing negotiations, and regulatory approvals.

Beyond the initial $1 billion investment, Volkswagen is committed to an additional $4 billion in Rivian and the joint venture by 2026. This includes two $1 billion investments in Rivian’s shares in 2025 and 2026, contingent on specific milestones. Additionally, Volkswagen will contribute $1 billion to the joint venture in 2024 and provide a $1 billion loan in 2026.Overall, Volkswagen could invest a total of $5 billion by 2026, with $2 billion potentially disbursed in fiscal year 2024. Consequently, Volkswagen has adjusted its financial forecast for 2024, predicting net cash flow in the Automotive Division to be between €2.5 billion and €4.5 billion, down from the previous €4.5 billion to €6.5 billion. Net liquidity is expected to be between €37 billion and €39 billion.

Source : Volkswagen News / Coverager

Rewritten by : Umar Javed

Header : Rivian R3X – Rivian.com