Rivian Automotive, an American EV manufacturer, and Volkswagen Group, a German automotive company, announced plans to form an equally owned joint venture to develop next-generation electrical architecture and software technology.

In addition, Volkswagen Group plans to invest USD 5 billion in Rivian, with an initial investment of USD 1 billion through a convertible note, followed by an additional USD 4 billion over time.

The partnership is expected to accelerate software development for both companies, provide cost savings through increased scale, and accelerate innovation globally. Rivian's electrical architecture and technology platform will be the foundation for future software development in the joint venture, benefiting both companies' vehicles.

The partnership and subsequent funding will breathe new life into Rivian's operations. One major project that can move forward is a new manufacturing facility in Georgia, which Rivian had previously suspended to offset financial losses. The company has committed to investing USD 5 billion in the Georgia project through 2030.

Rivian's stock spiked over 50% after the announcement, making up for half of this year's losses. The company primarily produces electric pickups and SUVs but has faced hurdles in ramping production and deliveries. Despite these challenges, Rivian briefly surpassed the market value of traditional automakers such as Ford and General Motors after its November 2021 IPO.