Volkswagen Just Dumped $1 Billion Into Rivian

• Volkswagen just invested $1 billion into Rivian.
• There's the possibility for $4 billion more.
• The two companies plan on building a joint venture together.

Volkswagen AG has taken a $1 billion stake in Rivian and intends to establish a joint venture with the automotive startup. Volkswagen said its total investment in the joint venture could reach $5 billion by 2026. Volkswagen is the second legacy automaker to invest in Rivian after Ford. Other big-ticket investors include Amazon.

Rivian has recently been struggling amid stagnant EV adoption and the need to retool its Normal, Illinois, assembly plant for the recently refreshed R1T and R1S models (both of which we've already driven). The billion-dollar move by Volkswagen comes at the right time, as Rivian has an investor call on the books for Thursday of this week. Rivian posted a $1.45 billion loss in Q1 of this year even as it grew Q1 revenue 82% year over year.

The move also comes just a few months after Volkswagen announced its new sub-brand, Scout Motors, will debut two new cars this summer. The new EV sub-brand would make — and you might have seen this coming — rugged, off-road lifestyle SUVs (something Rivian is already very good at). VW is already working on its new production facility in Blythewood, South Carolina, and the facility will be able to produce up to 200,000 vehicles a year.

The joint venture between the two companies isn't a sure thing yet, but should it receive the necessary approval it would be owned 50/50 by Rivian and VW. The company would focus on e/e architecture, which is essentially the integration of electronics, software, and wiring into one system. The investment by Volkswagen would be dolled out in billion-dollar increments and "would be contingent on Rivian Automotive, Inc., and the joint venture achieving certain milestones."

Edmunds says

Hopefully this investment is a boon for both companies and we get better products because of it.