Electric vehicle maker Rivian Automotive, Inc. RIVN is poised to extend its gains on Wednesday, with the upward momentum likely accelerating. Rivian announced Tuesday plans to form an equally controlled and owned joint venture with Volkswagen AG’s VWAGY U.S. subsidiary to create next-generation electrical architecture and best-in-class software technology.
As part of the plan, the German company will invest $1 billion in Rivian, with up to $4 billion in planned additional investment for a total expected deal size of $5 billion
The company said in an 8-K filing with the SEC that it has entered into an agreement with Volkswagen to raise $1 billion in debt financing through the offering of $1 billion in principal amount of 4.75% convertible promissory notes. These notes can be converted into common stock, contingent on meeting specific conditions, after receiving regulatory approvals and by Dec. 1, 2024.
The electric-vehicle industry is going through challenging times amid a demand slowdown and companies without deep pockets are finding it difficult to survive due to the turbulence. The case in point is the recent bankruptcy of Fisker, which went under following its failure to find a strategic investor.
In premarket trading, Rivian rose 36.71% to $16.35, according to Benzinga Pro data. This comes on top of the 8.63% rally the stock saw on Monday amid a positive analyst’s action.
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Courtesy of Rivian Automotive
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