04:58 AM EDT, 06/26/2024 (MT Newswires) -- (Updates with the stock move in the headline and the first paragraph.)

Rivian Automotive's ( RIVN ) shares were up 35% in premarket activity Wednesday after the company unveiled it will receive up to $5 billion in investments from Volkswagen to create an equally-controlled joint venture on electric vehicle architecture and software technology.

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 the midsize platform near Atlanta, Georgia.

Price: 17.93, Change: +5.97, Percent Change: +35.12