Rivian Stock Races Higher After The Bell: What's Going On?

Rivian Automotive Inc (NASDAQ:RIVN) shares are moving higher in Tuesday’s after-hours session after the company announced the launch of its joint venture with Volkswagen Group.

What Happened: Rivian and Volkswagen entered into a transaction agreement to create a new joint venture called “Rivian and VW Group Technology, LLC.” The deal has a total value of up to $5.8 billion and is expected to commence on Wednesday.

The joint venture will focus on providing next-generation electrical architecture and software technology for both companies’ future electric vehicles across relevant vehicle segments.

Developers and software engineers from both companies are expected to join the joint venture. Teams will be based in Palo Alto, California, initially, with three other sites in development. Rivian’s Wassym Bensaid and Volkswagen’s Carsten Helbing will lead the joint venture as co-CEOs.

“Today’s finalization of our joint venture with Volkswagen Group marks an important step forward in helping transition the world to electric vehicles. We’re thrilled to see our technology being integrated in vehicles outside of Rivian, and we’re excited for the future,” said RJ Scaringe, founder and CEO of Rivian.

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Rivian and Volkswagen expect to reduce development costs and scale new technologies more quickly through the joint venture. The joint venture aims to use existing Rivian architecture and software to enable the launch of Rivian’s R2 in the first half of 2026. The first models from Volkswagen supported by the joint venture are anticipated as early as 2027.

Volkswagen has already invested $1 billion in convertible senior notes. The company will invest about $1.3 billion at the closing of the joint venture. Volkswagen plans to invest up to $5.8 billion by 2027.

Rivian is currently discussing the announcement on a call with investors that kicked off at 5 p.m. ET.

RIVN Price Action: Rivian shares were up 9.64% in after-hours, trading at $11.60 at the time of writing Tuesday, according to Benzinga Pro.

Photo: Courtesy of Rivian.