RIVN Stock Alert: Rivian Denies Production Plans with Volkswagen

Last week, Volkswagen (OTCQB:VWAG) announced that it would invest up to $5 billion in Rivian (NASDAQ:RIVN) over the next few years, with $1 billion of that to go into a joint venture (JV) focused on developing next-generation software-defined vehicle (SDV) platforms.

After the news became known, speculation arose that the two companies could collaborate on production. Deutsche Zeitung Handelsblatt noted that Volkswagen could possibly produce the R2 SUV at its South Carolina plant.

However, Rivian was quick to dispel the rumor. A spokesperson stated, “There are no plans to produce vehicles with the Volkswagen Group.” The spokesperson added that production of the R2 will begin in Normal, Illinois, before the new plant in Georgia opens.

Reservations for the R2 are currently available in the US and Canada. The vehicle’s starting price is $45,000, and deliveries are scheduled to begin in the first half of 2026.

RIVN share: Rivian denies production plans with Volkswagen

When contacted by ReutersVolkswagen pointed out that the focus of the deal was primarily on the joint venture.

A spokesman for Scout Motors, a Volkswagen sub-brand produced in South Carolina, said they were unaware of any plans to produce Rivian vehicles.

While a manufacturing partnership could help cut costs and help Rivian become profitable faster, the electric car company has its own cost-cutting plans in the works. Recently, it “removed over 100 steps from the battery manufacturing process, 52 pieces of equipment from the body shop, and over 500 parts from the design of its flagship SUVs and pickups.” In addition, Rivian has reduced material costs for its electric delivery truck by 35%.

The company expects these efforts to result in a positive gross margin by year-end. Wall Street analysts have forecast a gross margin of 3.06% for the fourth quarter.

Rivian said yesterday that it delivered 13,790 vehicles in the second quarter, 14.9% above analyst estimates of 12,000 vehicles. Production totaled 9,612 vehicles compared to 13,992 vehicles a year ago, with the lower production due to a planned factory closure for upgrades between April 5 and April 30.

At the time 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 author and are subject to InvestorPlace.com Publishing guidelines.

At the time of publication, the editor in charge did not own (either directly or indirectly) any positions in the securities mentioned in this article.