(Reuters) – Rivian Automotive surged 36% premarket on Wednesday after a $5 billion funding from Volkswagen supplied the loss-making startup extra firepower to scale manufacturing in a slowing electric-vehicle market.The funding will even bolster Rivian’s depleting money reserves, additional its goal of changing into worthwhile on a gross margin foundation later this yr and assist it compete higher in a market dominated by Tesla.”It is a huge vote of confidence within the EV maker’s prospects,” stated Susannah Streeter, head of cash and markets at Hargreaves Lansdown.”Becoming a member of forces on this means may additionally assist decrease the cost-per-vehicle and bolster defences in opposition to the rising may of Chinese language EV makers.”The information, nonetheless, got here as a blow to auto elements and software program provider Aptiv as brokerage Piper Sandler stated the deal, which can present Volkswagen with Rivian’s electrical structure and software program platforms, highlights the lowering reliance on third-party software program in autos.It additionally downgraded Aptiv to “underweight” from “impartial”.If Rivian’s good points maintain on Wednesday, the inventory will add greater than $4 billion to its market capitalization, after closing at $12 billion a day earlier. The inventory had misplaced almost half its worth this yr after the California-based EV maker stated in February it doesn’t count on to supply extra autos in 2024.It had scrapped earlier offers to make electrical autos and business vans underneath separate joint ventures with Detroit automaker Ford in 2021 and Mercedes Benz in 2022.Volkswagen’s funding will even present Rivian the funding essential to develop its inexpensive and smaller R2 SUVs and its deliberate R3 crossovers, CEO RJ Scaringe instructed Reuters.Rivian’s R2 SUV, set to roll out in early 2026, will likely be priced beginning at $45,000 and can compete with Tesla’s best-selling Mannequin Y compact SUV.(Reporting by Akash Sriram in Bengaluru; Enhancing by Devika Syamnath)