Volkswagen AG resolves on funding by Volkswagen of initially 1 billion USD in Rivian Automotive, Inc., and intends to ascertain a three way partnership with Rivian Automotive, Inc., within the space of E/E structure. Complete investments from Volkswagen in Rivian Automotive, Inc., and the three way partnership may develop to as much as 5 billion USD till 2026.
The Administration Board of Volkswagen AG in the present day resolved with the approval of the Supervisory Board of Volkswagen AG that Volkswagen will enter right into a Convertible Promissory Observe Buy Settlement with Rivian Automotive, Inc. Below the phrases of this settlement, Volkswagen will grant Rivian Automotive, Inc., a convertible word within the quantity of 1 billion USD. The word will convert right into a direct shareholding of Volkswagen in Rivian Automotive, Inc., upon the receipt of the required regulatory approvals, however not earlier than 1 December 2024. The dimensions of the shareholding is set in accordance with sure common share costs of the shares of Rivian Automotive, Inc., for one half of the fairness curiosity as of the time of the conclusion of the Convertible Promissory Observe Buy Settlement and for the opposite half of the fairness curiosity as of the conversion day.
As well as, Volkswagen and Rivian Automotive, Inc., intend to ascertain a three way partnership for the aim of the joint creation of subsequent technology electrical/digital structure (so-called E/E-architecture) for electrical autos. Volkswagen and Rivian Automotive, Inc., shall every maintain a 50 % stake within the three way partnership, and it shall be equally managed. Upon profitable implementation of the three way partnership, Volkswagen would obtain quick entry to Rivian Automotive’s present E/Earchitecture expertise for utilizing it in its electrical autos. The precise institution of the three way partnership will depend on a sequence of various parameters, specifically, the ultimate outcomes of the additional evaluation of the technical feasibility of the combination of the E/E-architecture in autos of Volkswagen, the additional negotiations between the events in addition to regulatory approvals. In opposition to this background, a remaining resolution on the institution of the three way partnership has not been made but.
In case the three way partnership could be established efficiently, Volkswagen intends to make additional investments in shares of Rivian Automotive, Inc., or within the three way partnership within the complete quantity of 4 billion USD. The extra funding in shares of Rivian Automotive, Inc., could be made in two tranches of 1 billion USD every in 2025 and 2026 and could be contingent on Rivian Automotive, Inc., and the three way partnership reaching sure milestones. With respect to the three way partnership Volkswagen would offer a fee within the quantity of 1 billion USD upon basis of the three way partnership in 2024 and grant a mortgage within the quantity of 1 billion USD in 2026. If the three way partnership shall be efficiently carried out and sure additional milestones are achieved, the entire funding of Volkswagen in shares in Rivian Automotive, Inc., in addition to in fairness and debt within the three way partnership would combination in a complete quantity of 5 billion USD by 2026; part of which within the quantity of two billion USD could be paid out nonetheless in fiscal 12 months 2024.
The introduced transaction may lead to an unplanned money outflow of as much as 2 billion EUR within the present fiscal 12 months. Subsequently, Volkswagen AG is updating its monetary forecast for fiscal 12 months 2024 as follows: Within the Automotive Division, Volkswagen AG now expects internet money circulate to vary between 2.5 billion EUR and 4.5 billion EUR (beforehand: 4.5 billion EUR to six.5 billion EUR) and internet liquidity between 37 EUR billion and 39 billion EUR.
Lars Korinth
Head of Group Investor Relations