NORMAL -- Volkswagen Group plans to invest $5 billion in Rivian Automotive as part of a new joint venture that the companies said would allow them to share technology.
The companies said in a shared statement on Tuesday they have been working for months to ensure Rivian's "electrical architecture" and software are compatible with Volkswagen vehicles.
They expect formation of the joint venture to be wrapped up in the fourth quarter of 2024.
"Not only is this partnership expected to bring our software and associated zonal architecture to an even broader market through Volkswagen Group's global reach," Rivian CEO and founder R.J. Scaringe said in a statement, "but this partnership also is expected to help secure our capital needs for substantial growth."
He credited Rivian's development of unique technology with attracting the recognition of Volkswagen, "one of the world's largest and most respected automotive companies."
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Volkswagen Group will invest $1 billion in the California-based electric automaker initially, with another $4 billion planned as part of the transaction, the companies said.
"The partnership fits seamlessly with our existing software strategy, our products, and partnerships," Volkswagen Group CEO Olivia Blume said. "We are strengthening our technology profile and our competitiveness."
Rivian has more than 8,500 employees in Normal, where it manufactures all of its electric trucks, SUVs and delivery vans.
Last month, Gov. J.B. Pritzker announced Rivian will receive an $827 million state incentive package that would allow the company to further expand operations at its plant in Normal. At the time, the company said it would invest $1.5 billion to create 550 full-time jobs within the next five years.
In March, the company said it would pause production on a planned $5 billion factory in Georgia and instead bring production of its new R2 model to Normal. The midsize SUV, with a $45,000 price point calculated to make the vehicles more accessible to consumers, is slated for release in early 2026.
This is a developing story that will be updated.
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