Volkswagen, the German automaker, said on Tuesday that it would invest up to $5 billion in Rivian, a maker of electric trucks that has struggled to turn a profit, and that the companies would cooperate on software for electric vehicles.
Volkswagen said it would initially invest $1 billion in a new joint venture, and over time increase that to as much as $5 billion. The infusion represents a big vote of confidence in Rivian, which loses tens of thousands of dollars on each vehicle it sells.
The deal provides cash to Rivian, which has struggled to ramp up manufacturing of its electric pickups and sport utility vehicles. The deal could also help Volkswagen, which has struggled to develop software for its electric vehicles and compete with Tesla, by giving it access to Rivian’s software expertise.
Rivian’s stock jumped 30 percent in extended trading on Tuesday after the deal was announced.
Vehicles using the new software will go on sale during the second half of the decade, Volkswagen said. The two companies will continue to market their vehicles separately.
This is a developing story. Check back for updates.
