Volkswagen To Invest $5 Billion In Rivian To Develop Software Under New Joint Venture
Volkswagen has announced its plans to invest up to $5 billion in the American electric vehicle startup Rivian. The goal of this joint venture will be to develop advanced electric architecture and software technology for electric vehicles (EVs). Both companies aim to incorporate this technology into new vehicles that will be released in the second half of the decade. VW has clarified that it will continue working on its upcoming electric brand ‘Scout’ for North America despite the joint venture announcement with Rivian.
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To kickstart this collaboration, Volkswagen will provide $1 billion to Rivian this year through an unsecured convertible note. This initial investment will be followed by an additional $4 billion by 2026. The joint venture will be formed in the final quarter of the year with both Volkswagen and Rivian having equal ownership and control.
Oliver Blume, CEO – Volkswagen Group, said, “Our customers benefit from the targeted partnership with Rivian to create a leading technology architecture. Through our cooperation, we will bring the best solutions to our vehicles faster and at a 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.”
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RJ Scaringe, Founder and CEO – Rivian, added, “We’re very excited to be partnering with Volkswagen Group. 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.”
Rivian currently offers the R1T pickup and R1S SUV. It plans to expand its portfolio with the R2 and R3 platforms in the future. The company is focused on reducing costs and increasing capital to bring these new platforms to the market. Meanwhile, Volkswagen has been expanding its ID range of EVs globally. The announcement does come amidst a slowdown in EV sales with automakers restructuring plans for an all-electric future.
