Amazon-backed elective vehicle firm Rivian (NASDAQ:RIVN) saw its shares soar on news of a new $5 billion partnership with German car maker Volkswagen.
VW will invest up to $5 billion, starting with an initial $1 billion injection into a new joint venture.
This new partnership aims to develop shared electric vehicle (EV) architecture and software.
It is seen as a boost for Rivian’s development of its R2 SUVs, which are slated to roll out by 2026.
The deal will see Rivian license its existing intellectual property to the VW venture, and it is expected to accelerate the German group’s development of ‘software-defined vehicles’ (SDVs).
“Our customers benefit from the targeted partnership with Rivian to create a leading technology architecture,” VW chief executive Oliver Blume said in a statement.
“Through our cooperation, we will bring the best solutions to our vehicles faster and at lower cost.
“The partnership fits seamlessly with our existing software strategy, our products, and partnerships. We are strengthening our technology profile and our competitiveness.”
Rivian founder and chief executive RJ Scaringe added: “Since the earliest days of Rivian, we have been focused on developing highly differentiated technology, and it’s exciting that one of the world’s largest and most respected automotive companies has recognized this.”
In New York, Rivian stock was up 8.6% in regular trading, closing Tuesday’s session at $11.96, before gaining a further $6.34 or 53% to trade at $18.34 in ‘afterhours’ dealing.
Amazon (NASDAQ:AMZN) is the largest shareholder in Rivian, owning 16% of the EV company.
