Rivian Automotive (RIVN) stock is one of the best performers Wednesday, up nearly 30% Wednesday after the electric vehicle (EV) maker announced a major partnership with Volkswagen Group.
Under the terms of the deal, Volkswagen will make an initial investment of $1 billion in Rivian through an unsecured convertible note. This will convert into Rivian common stock on or after December 1, 2024, the companies said in a press release.
Volkswagen will invest an additional $1 billion in both 2025 and 2026. The German automaker will also make an extra $2 billion investment in 2026 as part of a joint venture that will "create next-generation software-defined vehicle (SDV) platforms to be used in both companies' future electric vehicles."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The investment will accelerate the development of software for both automakers and will allow them to combine their strengths while lowering the cost per vehicle through scale and speeding up innovation, the companies said.
"We're very excited to be partnering with Volkswagen Group," Rivian founder and CEO RJ Scaringe said in a statement. "Since the earliest days of Rivian, we have been focused on developing highly differentiated technology, and it's exciting that one of the world's largest and most respected automotive companies has recognized this."
Meanwhile, Volkswagen Group CEO Oliver Blume said its customers will "benefit from the targeted partnership with Rivian to create a leading technology architecture."
Is Rivian stock a buy, sell or hold?
Wall Street is generally bullish towards the consumer discretionary stock. According to S&P Global Market Intelligence, the average analyst target price for RIVN stock is $16.30, representing implied upside of about 6% to current levels. Additionally, the consensus recommendation is Buy. However, these estimates may be revised higher following the Volkswagen news.
Financial services firm Wedbush is one of those firms revising their price target after the news.
"We are raising our price target on Rivian from $15 to $20 while maintaining our Outperform [Buy] rating with the VW news a game changer for the Rivian story," Wedbush analyst Daniel Ives said in a note this morning. "This is a core game changer for Rivian and changes the capital structure of the company looking ahead for the story and the Street's view at a key time."
Wedbush's new $20 price target represents implied upside of roughly 30% to current levels.
Related Content
- Kiplinger ESG 20: Our Favorite ESG Stock and Fund Picks for Investors
- Best Growth ETFs To Buy Now
- Analysts' Top S&P 500 Stocks to Buy Now
-
Markets Are Quiet Ahead of Fed Day: Stock Market TodayInvestors, traders and speculators appear to be on hold amid an unusually fraught Fed meeting.
-
Quiz: Test Your Knowledge of the OBBB, Wealth Transfer and Early RetirementQuiz The financial professionals who contribute to Kiplinger's Adviser Intel recently wrote about the OBBB's impact on retirement, how to ensure your wealth passes to your family and early retirement questions.
-
Markets Are Quiet Ahead of Fed Day: Stock Market Today
Investors, traders and speculators appear to be on hold amid an unusually fraught Fed meeting.
-
5 Multibagger Stocks With Amazing Returns in 2025multibagger stocks As the term suggests, multibagger stocks multiply your money – gains of 1,200%, for example. Here's where to look for that kind of performance this year.
-
Investing Freebies: Perks You Get for Owning These StocksWhile the biggest investing returns come over the long term, these companies offer instant gratification for investors with several freebies and perks.
-
How an Expired Passport Thwarted Blackmail (and What Other Important Documents You Should Keep)An optometrist produced his expired passport to foil a blackmail attempt by the daughter of a former employee. After proving he was out of the country on the date of a forged diary entry, he took it a step further.
-
Optimize, Grow, Retain: The Power of Annual Client ReviewsFinancial advisers can use annual reviews to help enhance client outcomes, strengthen relationships and build their practice.
-
I'm a Real Estate Investing Pro: This Is What Investors Should Know About Truck Stop InvestmentsTruck stops might seem like good investments, but they can actually be a risky gamble due to unstable fuel prices, unreliable operators and coming changes in transportation. Instead, consider safer options like industrial or residential properties.
-
How Digital Platforms Are Changing the Way You Invest in GoldInvesting in gold is easier than ever thanks to digital platforms. Learn how online tools are lowering costs, increasing transparency and making gold accessible to all investors.
-
Stocks Rise to Start Fed Week: Stock Market TodayThe Nasdaq Composite and S&P 500 hit new record closing highs as Wall Street awaits the Fed's next rate cut.
