Shares of EV maker Lucid Group Inc (NASDAQ:LCID) are trading higher Wednesday in sympathy with Rivian Automotive Inc (NASDAQ:RIVN), which saw its shares soar after the company announced intentions to form an equally controlled and owned joint venture with Volkswagen.

What Happened: Rivian shares rallied after the market close on Tuesday after the company announced a $5 billion investment from German automaker Volkswagen.

Rivian and Volkswagen will enter into a joint venture to create next generation software-defined vehicle platforms to be used in both companies' future electric vehicles.

Volkswagen will initially invest $1 billion in Rivian through an unsecured convertible note that will be converted into Rivian common stock. Volkswagen is expected to invest an additional $4 billion over time as part of the transaction.

The two companies said they completed significant work in recent months to validate the compatibility of their technology. The completion of the joint venture formation is expected to occur in the fourth quarter of 2024.

"Since the earliest days of Rivian, we have been focused on developing highly differentiated technology, and it's exciting that one of the world's largest and most respected automotive companies has recognized this," said RJ Scaringe, founder and CEO of Rivian.

"Not only is this partnership expected to bring our software and associated zonal architecture to an even broader market through Volkswagen Group's global reach, but this partnership also is expected to help secure our capital needs for substantial growth."

Following the announcement, Truist Securities analyst Jordan Levy maintained Rivian with a Hold rating and raised the price target from $10 to $13. Rivian shares were up approximately 38% at last check.

LCID Price Action: Lucid shares were up 6.39% at $2.66 at the time of publication, according to Benzinga Pro.