Electric-vehicle startup Rivian (RIVN) has bagged a fresh $1 billion equity investment from Volkswagen Group (VWAGY). The investment was made at an effective price of $19.42 per share, reflecting a 33% premium over RIVN’s 30-day volume-weighted average stock price of $14.56.
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This capital injection is part of a larger $5.8 billion joint venture between the two automakers. Last year, Volkswagen initiated its investment with an initial $1 billion, acquiring an 8.6% stake in Rivian.
The latest funding was unlocked after Rivian posted its second consecutive quarter of gross profit in May, backed by its ongoing efforts to streamline manufacturing and cut costs.
Apart from the funding, the two companies are co-developing an EV platform, with Rivian contributing its software and electrical architecture expertise. Volkswagen, in turn, plans to use that technology to power its future EV lineup.
Challenges Remain
Despite the new funding, Rivian continues to face challenges. The company has reported a 23% drop in Q2 deliveries on a year-over-year basis to 10,661 vehicles. Further, RIVN had earlier lowered its full-year sales forecast due to trade tensions and the potential loss of U.S. EV tax credits.
Also, RIVN has reportedly laid off about 140 employees, around 1% of its workforce, ahead of its R2 SUV launch in 2026. The cuts, which will largely impact the manufacturing team, are aimed at improving efficiency as the company prepares for the new model.
Is RIVN a Buy or Sell?
Overall, RIVN stock has a Moderate Buy consensus rating based on seven Buy, 13 Hold, and three Sell recommendations. The analysts’ average price target on Rivian stock is $14.64, implying a 10.83% upside from current levels.
