Volkswagen Makes Additional Investment of Over 1 Trillion KRW in US Electric Vehicle Company Rivian

Existing $5 Billion → Expanded to $5.8 Billion

Volkswagen, the world's second-largest German automaker, has decided to make an additional investment worth over 1 trillion won in the U.S. electric vehicle startup Rivian.

According to foreign media including CNBC on the 12th (local time), Volkswagen will invest an additional $800 million (about 1.1 trillion won) in Rivian on top of the previously announced $5 billion (about 7 trillion won).

Earlier, Volkswagen announced in June that it planned to invest $5 billion in Rivian. The plan was to first secure a stake in Rivian with $1 billion and then establish a joint venture with Rivian with $4 billion.

On the same day, the two companies announced the management team of the joint venture that will develop electric vehicle computer systems (architecture) and software. The current Rivian Chief Software Officer (CSO) and Volkswagen Chief Technology Officer (CTO) will serve as co-Chief Executive Officers (CEOs). They will lead a technical team of about 1,000 engineers from both companies.

The two companies are also considering developing the latest software-based vehicles applying advanced technology and licensing them to other automakers. They plan to combine advanced electric vehicle infrastructure with Rivian's software technology to apply it to future electric vehicles from both companies.

Volkswagen's additional investment is notable as it comes amid a slowdown in electric vehicle demand and with U.S. President-elect Donald Trump expressing a negative stance on electric vehicle support policies.

The joint venture is seen as an attempt for both companies to complement each other's weaknesses. Volkswagen has faced difficulties in the software sector and recently requested a 10% wage cut from employees amid poor performance.

Rivian aims to reduce costs and increase profits by leveraging its partnership with the large company Volkswagen. Rivian was once seen as a rival to Tesla but has been struggling with poor performance due to decreased electric vehicle demand and high interest rates.

Rivian's stock price, listed in the U.S., has plummeted about 55% this year but rebounded about 9% in after-hours trading following the announcement.