05:18 PM EDT, 06/25/2024 (MT Newswires) -- Rivian Automotive ( RIVN ) will receive up to $5 billion investments from Volkswagen to create an equally-controlled joint venture on electric vehicle architecture and software technology, the companies said Tuesday.

Under the agreement, Volkswagen will initially invest $1 billion in Rivian before the year ends and up to an additional $4 billion until 2026. The initial investment will be in the form of a convertible note.

The two companies will each own 50% of the joint venture.

Rivian said Volkswagen's investments will be used together with its current cash, cash equivalents, and short-term investments to fund Rivian's operations through the ramp of R2 in Normal, Illinois, and midsize platform near Atlanta, Georgia.

Sales of Rivian surged 43% in after-hours activity following the announcement.

Price: 16.77, Change: +4.81, Percent Change: +40.22