Investing.com -- Volkswagen (ETR:VOWG_p) is exploring ways to strengthen its collaboration with US-based electric vehicle (EV) manufacturer Rivian (NASDAQ:RIVN), the German auto giant’s CEO Oliver Blume told Spiegel magazine in comments published on Friday.
"For example, we are thinking about sharing modules and bundling purchasing volumes," Blume stated. "The Volkswagen group offers great opportunities for a small brand like Rivian."
Rivian shares jumped more than 3% in premarket trading Friday.
Last year, the two companies entered into a joint venture, with Volkswagen increasing its financial commitment to the partnership. The value of the collaboration now stands at $5.8 billion (£4.55 billion), up from VW’s initial investment of $5 billion.
The partnership is aimed at sharing key technologies during a challenging period for the EV market, which faces slowing sales growth and growing competition from Chinese manufacturers.
For Rivian, which has yet to turn a profit, the joint venture provides critical funding as it gears up for the launch of its R2 model—an SUV designed to be smaller and more budget-friendly than its current lineup.
Meanwhile, Volkswagen will gain access to Rivian’s technology for use in its own vehicles, with the first VW models integrating this technology expected to hit the market by 2027.
Separately, Rivian announced on Thursday that it has finalized a loan agreement with the US Department of Energy’s Loan Programs Office (LPO). The agreement secures up to $6.6 billion, including $6 billion in principal and around $600 million in capitalized interest, to fund the construction of a new manufacturing facility in Stanton Springs North, Georgia.
The project aims to bolster US leadership in the EV sector, create 7,500 new jobs, and support production of Rivian’s upcoming R2 SUV and R3 crossover.
Construction of the facility is slated to begin in 2026, with vehicle production expected to start in 2028. The loan marks the culmination of over two years of collaboration between Rivian and the Department of Energy.
“This loan will help us accelerate the launch of our Georgia plant for R2 and R3, providing thousands of jobs in the state,” said Rivian Founder and CEO RJ Scaringe.
“People are incredibly excited to get behind the wheel of our new models, and this additional capacity for our mass market products is key to U.S. leadership in the electric vehicle industry."
The loan will be allocated in two phases to support Rivian’s new facility in Georgia. Excluding the capitalized interest, the first phase will involve up to $3.4 billion, while the second phase will account for up to $2.6 billion.