June 26 (Reuters) – Rivian Automotive (RIVN.O), opens new tab surged 36% premarket on Wednesday after a $5 billion investment from Volkswagen (VOWG_p.DE), opens new tab offered the loss-making startup more firepower to scale production in a slowing electric-vehicle market.

The investment will also bolster Rivian’s depleting cash reserves, further its target of becoming profitable on a gross margin basis later this year and help it compete better in a market dominated by Tesla (TSLA.O), opens new tab.