Volkswagen and Rivian officially launch joint venture

Volkswagen and US electric car maker Rivian have entered into a transaction agreement, officially creating their joint venture. To that end, the German automaker invested 5.8 billion dollars in Rivian - more than initially planned.

The companies first announced their cooperation earlier this summer. The goal of the 50:50 joint venture called ‘Rivian and VW Group Technology, LLC’ is to create class-leading software technology and next-gen electrical/electronic (E/E) architecture. The first vehicles born from the partnership will launch in 2027. As part of the deal, Volkswagen initially wanted to invest up to five billion dollars in the US startup. Apparently, the investment is higher than announced in June – now 5.8 billion dollars – because more cars will be equipped with the new software than initially planned.

Volkswagen Group and Rivian want to co-develop the next-generation (E/E) architecture and software stack for software-defined vehicles (SDVs). The first models could be from VW’s North American brand Scout, as well as an electric Porsche SUV. On a side note: The first Volkswagen EV based on the SSP, the parent company’s upcoming indigenously developed mechatronics platform, is due around the same time (2028).

But back to Rivian’s electrical architecture, which the US startup will also use for its upcoming R2. The joint venture is said to “evolve this modular and flexible state-of-the-art electrical architecture,” the companies state. Moreover, the new company “will scale the technology across a wide range of price points and international markets, paving the way for new generations of high-volume vehicles that are fully capable of advanced automated driving functions and can integrate over-the-air updates (OTA) and upgrades.”

“The partnership with Rivian is the next logical step in our software strategy. With its implementation, we will strengthen our global competitive and technological position,” commented Oliver Blume, CEO of Volkswagen Group, adding: “Today’s launch of the joint venture demonstrates the potential we want to leverage together in the coming years. We have a clear plan to offer our customers the best products and digital experiences at attractive prices through state-of-the-art development processes, innovative technological approaches, and a competitive cost base driven by synergies.”

“We’re thrilled to see our technology being integrated in vehicles outside of Rivian, and we’re excited for the future,” said RJ Scaringe, Founder and CEO of Rivian. “Rivian will continue to stay focused on creating best-in-class products and services that benefit our customers, helping to drive EV adoption.”

‘Rivian and VW Group Technology’ will be headed by Wassym Bensaid from Rivian and Carsten Helbing. Moreover, developers and engineers from both companies will work for the joint venture, which will be based in Palo Alto in Silicon Valley, California. According to the press release, “three other sites are in development in North America and Europe.”

“We have made a successful start. Over the past few months, we’ve created the framework for bringing together the JV teams and pooling our resources. We are thrilled with the rapid progress we have achieved in the preparatory phase. This has laid the foundation for our future success,” explained designated co-CEO Carsten Helbing.

The other designated co-CEO, Wassym Bensaid, added: “The aim of the joint venture is to speed up innovation, increase scale and lower the cost of owning an EV for millions of people around the world. I’m hugely impressed by the work done already. While the demonstrator vehicle only scratches the surface of what is possible, it’s incredibly exciting to see what is possible when a new OEM and a legacy automaker work closely together.”

What will become of Cariad?

After signing a deal with Rivian in June, VW cancelled Cariad’s E3 2.0 software platform. The latter is Volkswagen Group’s in-house software company, which developed E3 1.1 and E3 1.2 software platforms for its current model.

Moreover, according to German media, citing insiders, software architect Sanjay Lal, who only joined Cariad a year ago, could already be packing his bags again. It could be a direct result of the above-mentioned partnership between VW and Rivian, which will also see about 100 Cariad employees joining the new joint venture.

On top of that, the software company’s budget has been slashed by more than half since mid-2023. And Volkswagen has been looking elsewhere for software experts, also signing a deal with Chinese manufacturer Xpeng.

businesswire.com (JV), manager-magazin.de, golem.de (Cariad; both in German)