Volkswagen, the world's second-largest automaker, on Tuesday announced that it will enter a 50-50 joint-venture with US electric vehicle (EV) manufacturer Rivian.

Germany-based VW said it will invest $5 billion (€4.7 billion) in a deal to jointly develop next-generation software that both it and the California-based Rivian will share in their vehicles.

Volkswagen said the software will be used in vehicles from both companies in products scheduled to come to the market before 2030.

"The partnership will accelerate the software development of the Volkswagen Group and Rivian," the statement continued. 

"With our work together we will more quickly achieve the best solutions for our vehicles at a lower cost," said VW CEO Oliver Blume.

VW has been plagued by problems with its own software development company CARIAD, forcing its subsidiaries Audi and Posche to delay the introduction of new EVs by as much as two years, according to the German business daily Handelsblatt.

News of the deal gave a 42% boost to Rivian stocks in after-hours trading.

Founded in 2009, Rivian is valued at around $11 billion on the Nasdaq technology exchange despite the fact that it has been losing billions with its electric pickups and SUVs to date.

In the first quarter on 2024, the company said it was losing $38,000 per vehicle.

js/jsi (AFP, Reuters)