Rivian (RIVN) stock rises as Volkswagen plans to expand $5.8 billion EV partnership

Rivian’s (RIVN) stock is trending on Friday after Volkswagen CEO Oliver Blume hinted at expanding upon their new EV partnership. Volkswagen’s boss said the company could offer “great opportunities” for Rivian. Here’s what the new plans could include.

Rivian stock climbs on Volkswagen EV partnership plans

After launching their new joint venture in November, “Rivian and VW Group Technology, LLC,” Volkswagen is already looking to expand its partnership with the EV startup.

Blume told German news outlet Spiegel that “The Volkswagen Group offers great opportunities for a small brand like Rivian” on Friday. For example, Volkswagen’s head honcho said, “We are thinking about sharing modules and bundling purchasing volumes.”

Volkswagen already plans to invest up to $5.8 billion in the collaboration, which, according to Rivian CEO RJ Scaringe, is a “meaningful financial opportunity.”

So far, the partnership is mainly software support. Rivian is using its software expertise to develop a new EV architecture to power up new SDV (software-defined) electric vehicles.

Rivian already uses the platform and software stack, which consists of seven control units. Volkswagen models typically have over 100 of these units. The next steps could involve a joint purchase, deepening the VW/ Rivian EV alliance.

The architecture is designed to cut costs and speed up output. According to the report, a new ultra-luxury three-row Porsche electric SUV, codenamed “K1” internally, and the electric Golf successor will be among the first EVs to feature the new architecture.

Audi, Porsche, and the upcoming Scout brand for the US will use the new tech. Scout will launch an off-road electric SUV and pickup built at Volkswagen’s new plant in South Carolina from 2027.

The news comes after Rivian closed a loan agreement with the US Department of Energy (DOE) on Thursday for up to $6.6 billion in funding for its new EV plant in Georgia.

Rivian’s second manufacturing plant will house its midsize R2 and R3 electric models. The smaller, more affordable electric SUV and crossover will also benefit from the Volkswagen alliance.

On Friday, Rivian stock trended up over 5% after Volkswagen’s Blume hinted at expanding the new EV partnership. Since reporting third-quarter earnings in November, RIVN shares are up over 57%. However, they are still down nearly 10% over the past 12 months.