Volkswagen Group announces $5 bn deal with Rivian

Volkswagen Group will initially invest $1 billion in Rivian and then up to $4 billion in subsequent steps until 2026, bringing the net size of the expected deal to $5 billion. With the new joint venture, the companies aim to bundle their E/E architecture and software-defined activities. Upon the successful formation of the new company, the German carmaker would receive immediate access to Rivian’s current E/E architecture.

Volkswagen Group foresees $3 billion of the total expected $5 billion investment as a direct investment into Rivian, making it a sizeable shareholder in the California automaker, CEO Oliver Blume said during a conference call yesterday. The remaining $2 billion is related to the joint venture and background intellectual property. The company expects this sum to be split between a payment at the creation of the joint venture and for a license in Rivian’s E/E architecture, as well as a loan available in 2026.

Volkswagen Group and Rivian expect to complete the JV formation in the fourth quarter of 2024. Two Co-CEOs, one from each company, will lead the JV. The Rivian’s appointed Co-CEO will also serve as the JV’s Chief Technology Officer (CTO), while the Co-CEO Volkswagen Group picks for the JV will also hold the position of Chief Operating Officer (COO).

Expansive scope of jointly developed technologies

Volkswagen Group and Rivian want to co-develop the next-generation (E/E) architecture and software stack for software-defined vehicles (SDVs). The latter aims to release the first model with the co-developed technologies in the second half of the decade.

Blume has confirmed that Volkswagen Group’s deal with Rivian is not limited to its upcoming North America-focused Scout models. “We are able to use the result of our cooperation for all brands,” he said during the conference call.

Volkswagen Group aims to launch the first model utilising the technologies jointly developed with Rivian in the middle of the second half of the decade. The first Volkswagen EV based on the SSP, the parent company’s upcoming indigenously developed mechatronics platform, is due around the same time (2028).

Volkswagen Group has hinted that it will likely use an adapted version of Rivian’s E/E architecture in SSP-based EVs. Moreover, the company has cancelled the development of the in-house software platform it planned to utilise in these models.

CARIAD’s E3 2.0 software platform cancelled

CARIAD, Volkswagen Group’s in-house software company, has developed E³ 1.1 and E³ 1.2 software platforms for its current models. Following its deal with Rivian, the parent company is calling it quits on its next product, the software stack 2.0, also called E³ 2.0.

“Before the joint venture, CARIAD would have basically strengthened and invested in the, let’s call it (E3) 2.0, which is now done within the joint venture [with Rivian],” Volkswagen Group CFO and COO Arno Antlitz said during the conference call. Originally due in 2025, E³ 2.0 faced a long delay before receiving the axe yesterday.

To reassure analysts and investors that CARIAD will play a significant role in the company’s software strategy in the future, Blume said that CARIAD has the E³ 1.2 and E³ 1.2 software platforms and is developing central technologies like autonomous driving, connectivity, and infotainment.

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