Volkswagen Group has announced plans to invest up to $5 billion in electric vehicle startup Rivian, with an initial investment of $1 billion.

This investment is part of a larger commitment expected to unfold by 2026, with $1 billion allocated each in 2025 and 2026, and an additional $2 billion linked to a joint venture aimed at developing electrical architecture and software technology.

Rivian’s stock surged over 50% in after-hours trading ahead of an investor event, amidst challenges from Wall Street over cash burn and losses.

Volkswagen’s initial $1 billion investment will be in the form of a convertible note convertible to Rivian shares starting December 1, NBC News has reported.

Rivian CEO RJ Scaringe highlighted that this capital infusion will support the company’s path to achieving positive cash flow, aiding its production ramp-up of R2 SUVs in Illinois starting 2026 and resuming construction on a midsize EV platform in Georgia.

Written by B.C. Begley