Volkswagen Group and Rivian Automotive are setting up a joint venture, in which both parties will take an equal stake. Together, the parties want to develop a new architecture and software for electric vehicles (EVs). Volkswagen is also investing billions of dollars in Rivian.
Rivian is a US EV manufacturer that has been supplying its vehicles to customers since 2021. By joining forces, Volkswagen and Rivian aim to accelerate software development and lower the cost per vehicles by focusing on scale and faster innovations, among other things.
Software-defined vehicles
The parties are betting on software-defined vehicles (SDVs), meaning the parties will develop a vehicle platform on which both brands will be offered various features and options using software. The parties aim to launch the first joint vehicles in the second half of this decade. Both companies will continue to operate under their own company names as stand-alone entities.
As part of the joint venture, Rivian will bring its expertise in electric architecture, and licence its existing intellectual property to the joint venture. Volkswagen will have access to Rivian's existing electric architecture and software platform.
Billion-dollar investment
Volkswagen is in turn investing billions of dollars in Rivian. Initially, the investment is one billion dollars. In time, additional investments worth $4 billion are planned.
Oliver Blume, CEO of Volkswagen Group: "Our customers benefit from the targeted cooperation with Rivian to create industry-leading technology architectures. Through our cooperation, we bring the best solutions to our vehicles faster and at lower costs. We are also acting in the interest of our strong brands, which will inspire with their iconic products. The partnership fits seamlessly with our existing software strategy, our products and partnerships. We are strengthening our technology profile and competitiveness."
RJ Scaringe, founder and CEO of Rivian, added: "We are very excited to partner with Volkswagen Group. Since the early days of Rivian, we have focused on developing highly differentiated technology, and it is exciting that one of the largest and most respected car companies in the world recognises this. This partnership is not only expected to bring our software the associated zonal architecture to a wider market through the global reach of the Volkswagen Group, but is also expected to help secure our capital requirements for substantial growth. Rivian was founded to help the world transition away from fossil fuels through attractive products and services, and this partnership aligns beautifully with that mission."
Major boost
Volkswagen's investment is a major boost for Rivian, which was still making billions of dollars in losses in 2023. The news was therefore well received on the stock exchange. At the same time, analysts expect Rivian to need substantially more money over time, spending at least another $8 billion until 2027. Thus, the company has ambitious plans; it wants to continue the production of its current models and also launch two new models.
Author: Wouter Hoeffnagel
Image: Rivian
