Rivian (RIVN) shares are surging in prolonged hours after the EV maker introduced a three way partnership cope with Volkswagen (VWAGY), crucially bringing contemporary capital into Rivian’s coffers.Irving, Calif.-based Rivian’s shares had been up over 40% in after-hours buying and selling.Volkswagen introduced it intends to work with Rivian to create “subsequent technology software-defined automobile (SDV) architectures” for use in each corporations’ future EVs. The three way partnership will use Rivian’s “zonal {hardware} design” and platform for the inspiration of future automobiles, in addition to Rivian’s electrical structure experience for the automobiles. Rivian will license its present IP rights to the three way partnership.In change, Volkswagen will make investments an preliminary $1 billion in Rivian via an “unsecured convertible observe that may convert into Rivian’s widespread inventory,” with as much as $4 billion in extra funding staged via 2026 for a complete infusion of $5 billion.“The partnership matches seamlessly with our present software program technique, our merchandise, and partnerships. We’re strengthening our expertise profile and our competitiveness,” Volkswagen Group CEO Oliver Blume mentioned in an announcement.“Not solely is that this partnership anticipated to convey our software program and related zonal structure to a good broader market via Volkswagen Group’s international attain, however this partnership additionally is predicted to assist safe our capital wants for substantial progress,” Rivian CEO RJ Scaringe mentioned within the assertion.That is thrilling! Volkswagen Group CEO Oliver Blume and I are thrilled to announce the formation of a three way partnership between our two corporations. This partnership brings Rivian’s software program and zonal electronics platform to a broader market via Volkswagen Group’s international attain and… pic.twitter.com/11XVNUo89J— RJ Scaringe (@RJScaringe) June 25, 2024For Rivian, the information of contemporary capital allays considerations over the corporate’s runway because it bridges towards the discharge of its next-generation automobiles, the R2 and R3 mass-market SUVs.By way of its money cushion, Rivian mentioned it had $5.98 billion on the finish of Q1 versus $7.86 billion on the finish of This autumn. The extra money from Volkswagen presumably provides the corporate extra runway because it prepares to provide these new automobiles.Money infusion: A Rivian R3 SUV is displayed through the Rivian Reveals All-Electrical R2 Midsize SUV occasion at Rivian South Coast Theater in March. (Phillip Faraone/Getty Photographs for Rivian) (Phillip Faraone through Getty Photographs)Individually, Scaringe advised Reuters yesterday that Rivian was bettering its price construction and simplifying manufacturing at its Regular, Unwell., plant through, amongst different issues, upgrades to its manufacturing unit gear.Story continuesThis story is creating.Pras Subramanian is a reporter for Yahoo Finance overlaying the auto business. You possibly can observe him on Twitter and on Instagram.Click on right here for the most recent inventory market information and in-depth evaluation, together with occasions that transfer stocksRead the most recent monetary and enterprise information from Yahoo Finance