Last week, Volkswagen (OTCMKTS:VWAGY) announced that it would invest up to $5 billion into Rivian (NASDAQ:RIVN) over the next few years. $1 billion of that will go towards a joint venture (JV) focused on creating next-generation software-defined vehicle (SDV) platforms.
After the news broke, speculation arose that the two companies may collaborate on production. German newspaper Handelsblatt noted that Volkswagen could possibly produce the R2 SUV at its facility in South Carolina.
However, Rivian quickly dispelled the rumor, with a spokesperson stating that “There are no plans for production of vehicles with Volkswagen Group.” The spokesperson added that production of the R2 will begin in Normal, Illinois before the opening of its new Georgia plant.
Reservations for the R2 are currently open in the U.S. and Canada. The vehicle carries a starting price of $45,000 with deliveries set to begin during the first half of 2026.
RIVN Stock: Rivian Denies Production Plans With Volkswagen
When contacted by Reuters, Volkswagen noted that its primary focus with the deal is the JV.
A spokesperson for Scout Motors, a sub-brand of Volkswagen that is produced in South Carolina, noted that they were unaware of any plans to produce Rivian vehicles.
While a production partnership could help cut costs and assist in Rivian becoming profitable faster, the EV company has its own cost-cutting plans underway. Recently, it has “removed over 100 steps from the battery-making process, 52 pieces of equipment from the body shop and over 500 parts from the design of its flagship SUVs and pickups.” On top of that, Rivian has cut the material costs for its electric delivery van by 35%.
The company expects these efforts to result in a positive gross margin by the end of the year. Wall Street analysts have forecast a 3.06% gross margin for the fourth quarter.
Meanwhile, Rivian announced yesterday that it had delivered 13,790 vehicles during the second quarter. That came ahead of the analyst estimate for 12,000 vehicles by 14.9%. Production tallied in at 9,612 vehicles compared to 13,992 vehicles a year ago, although the lower production was attribute to a planned factory shutdown for upgrades between April 5 and 30.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
