Rivian, the scrappy EV startup with stars in its eyes, set out to plug a massive hole in the truck-loving, gas-guzzling heart of America. Because let’s face it, we all seem to have a soft spot for driving around in vehicles the size of small houses, even if they drink fuel like a frat boy on dollar-beer night. Tesla wasn’t even thinking about trucks until recently, so Rivian had a generational opportunity to win over those diesel-loving hearts.

Now think back to 2021 when Rivian went public with a bang and a $66.5 billion valuation. It was met with fanfare as we were just coming out of the pandemic and there was a lot of money chasing a lot of IPO’s. It felt like a new chapter in the EV saga that never ends. But things haven’t turned out as planned. Rivian’s market cap has plunged from $150 billion to around $16 billion, and its shares have tumbled 42% in 2024 alone.

So what happened? Well, for starters Rivian is currently losing about $1.5 billion every quarter. Over the past five quarters, they’ve been burning between $30,000 and $43,000 on each truck sold. Joe McCabe from AutoForecast even warns that Rivian might be just one or two failed programs away from bankruptcy. So, in a bid to save some cash, Rivian put the brakes on a planned $5 billion factory in Georgia, which was set to build their next generation of vehicles.

But then, like the time I saved my daughter from falling out of her high chair, Volkswagen came swooping in with a $5 billion investment, which could be Rivian’s saving grace. The two companies are expected to finalize a joint venture as early as Fall 2024. This partnership is massive on many levels. Not only does Rivian get a cash infusion, but it also gains the backing of a global automaker. VW sells around 9 million cars a year, while Rivian hopes to move about 200,000 vehicles a year from its plant in Normal, Illinois. With VW in its corner, Rivian might snag better deals from suppliers and improve its production efficiency.

But there’s more to this dynamic duo than just financial support. VW is also looking to dive into the Software Defined Vehicle (SDV) arena. For those not in the know, SDVs are cars controlled by software, allowing updates and new features even after you’ve driven off the lot. Tesla is a pro at this, while VW’s own software venture, Cariad, has been stumbling to put it mildly. VW is hoping Rivian’s geek squad will help turn its SDV dreams into a reality.

Rivian’s stock has literally been on fire, but not in a good way. Between May and July, the stock surged 84% following the VW partnership announcement. But it crashed and burned in August, losing nearly 14% of its value. The slide was fueled by a fire at Rivian’s plant and a parts shortage that forced a temporary halt in production of its electric delivery vans for Amazon. And then there was the 31% year-over-year drop in production, thanks to a major retooling at their Illinois plant. Nothing says confidence like having to explain why you’re not making your own product.

Despite these mishaps, Rivian’s partnership with VW offers a glimmer of hope. They’re so optimistic that they’re confident they'll turn a profit in the fourth quarter. To put that into perspective, Rivian’s Q2 gross profit was a painful -$451 million. Now that they’ve retooled their plant, it’s all set to ramp up production of their new second-generation EVs. Plus, Rivian is sticking to its full-year production target of 57,000 units, even though their Q2 output took a hit… you know, because of the fire. Ultimately VW’s investment and expertise could help Rivian ramp up production and potentially start making a decent profit, if (and that’s a big if) everything goes according to plan.

So, to wrap this up, is this the perfect EV match made in heaven? It could be. For VW, it’s a chance to boost its SDV capabilities. For Rivian, it’s a lifeline that could bring their electric truck dreams to fruition—assuming they can avoid more factory fiascos or tech failures.

Currently, Rivian’s stock is down 38% year-to-date, while VW’s stock is down 21%. Here’s hoping that these two can work together and turn their fortunes around. As my kid’s basketball coach always says, “Teamwork makes the dream work.” Let’s see if this partnership can indeed make some dreams come true.

P.S. While Rivian and VW are busy pouring billions into their partnership, hoping to fix production issues and software headaches, our last Stocks.News alert shot up 162% in just 24 hours. And trust me, this next one could be even bigger—click here to get access when it comes out.

Stocks.News holds positions in Amazon, Rivian, and Tesla.