Rivian shares soar after VW invests $5 bln

STORY: Rivian shares soared in late trade Tuesday after Volkswagen said it was investing up to $5 billion in the EV maker.

The stock gained around 50% in extended hours following the news.

It all comes as part of a new joint venture, meant to share EV architecture and software.

And it will give Rivian the funding it needs to develop new, more affordable models.

It should also help its cashflow turn positive.

In return, VW will get to use Rivian technology.

That would not just be at its namesake unit, but across group brands like Audi, Porsche and Lamborghini.

Analysts see that as a big win for the German giant, which has struggled with EV software.

It’s over budget and behind schedule on goals it set for developing the technology.

Industry watchers say it’s also a big plus for Rivian, giving investors more faith in its future.

It’s been losing nearly $40,000 on every vehicle it delivers, though it has at least avoided filing for bankruptcy like some other startups.

The company said recently it had overhauled its manufacturing process to cut costs and, hopefully, drive it towards profit.

Shares in the firm had halved this year, ahead of news of the VW boost.