Volkswagen Group will invest up to $5 billion in Rivian in a deal announced June 25, which also forms a joint venture to leverage Rivian's advanced technology to create electrical architecture and software to be used in both companies’ future EVs.
The deal includes an initial $1 billion investment by German automaker VW in U.S. EV startup Rivian, and up to $4 billion in planned additional investments.
The partnership is anticipated to accelerate the development of software for Rivian and VW by combining their complementary strengths, while lowering cost per vehicle by increasing scale and speeding up innovation globally.
It is expected to bolster Rivian's financial security as it deals with a general slowdown in EV demand, and benefit VW by giving it access to Rivian's proven hardware design and integrated technology platform, which will serve as the foundation for the development of future software-defined vehicle (SDV) platforms that will be applied to both companies’ vehicles. Rivian plans to contribute its electrical architecture expertise and is expected to license existing intellectual property rights to the joint venture.
Both companies aim to launch vehicles benefiting from the technology created within the joint venture in the second half of the decade.
In the short term, Volkswagen Group will use Rivian’s existing electrical architecture and software platform, after VW validated that Rivian’s technology are compatible with its vehicles. The parties currently expect the completion of the joint venture formation in the fourth quarter of 2024.
Each company will continue to separately operate their respective vehicle businesses.
“Our customers benefit from the targeted partnership with Rivian to create a leading technology architecture," said Oliver Blume, CEO of Volkswagen Group. "Through our cooperation, we will bring the best solutions to our vehicles faster and at lower cost. We are also acting in the best 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 our competitiveness."
“We’re very excited to be partnering with Volkswagen Group," said RJ Scaringe, founder and CEO of Rivian. "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. 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. Rivian was created to help the world to transition away from fossil fuels through compelling products and services, and this partnership is beautifully aligned with that mission.”
