Rivian Automotive: Upgrading On Volkswagen Investment And Proposed Joint Venture


  • After the close of Tuesday’s session, shares of electric vehicle manufacturer Rivian Automotive rallied by more than 50% following news of an initial $1 billion investment by Volkswagen.
  • In addition, the companies intend to establish a 50:50 joint venture to develop next generation electrical/electronic architecture for electric vehicles.
  • Should the proposed joint venture come to fruition, Volkswagen intends to invest an additional $4 billion in shares of Rivian and into the joint venture.
  • Essentially, Volkswagen appears to be buying into Rivian’s architecture to address persistent issues with its own CARIAD software unit, which have resulted in multi-year delays of some of its highest profile EVs.
  • While the proposed transaction will address the greatest individual blind spots of both companies, an outright takeover of Rivian by Volkswagen looks unlikely at this point.
  • With further near-term capital raises now unlikely, I am raising my rating on Rivian Automotive’s common shares from “Sell” to “Hold”.

Rivian R1S SUV and R1T Light Pickup Truck display at the Rivian Service Center.

jetcityimage/iStock Editorial via Getty Images


I have covered Rivian Automotive, Inc. (NASDAQ:RIVN) previously, so investors should view this as an update to my earlier article on the company.

After the close of Tuesday’s session, shares of electric vehicle manufacturer Rivian

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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