olkswagen Group and Rivian, Tesla’s rival, have officially launched a multi-billion-dollar joint venture to develop electrical software for a new generation of VW electric cars.
The latest news reports that the venture will kick off on November 13 as a fully independent company under the name Rivian and Volkswagen Group Technology, LLC.
The German automobile manufacturer Volkswagen is set to invest $5.8 billion by 2027, a 16% increase from the original deal announced earlier this year, which was $5 billion. The VW Group has already invested $1 billion in Rivian Automotive through a convertible note as part of the deal.
The VW Rivian joint venture will be led by Wassym Bensaid, the Chief of Software of Rivian, and Carsten Helbing, the Chief Technology Engineer of VW Group, as a 50-50 partnership. The companies will collaborate to develop the electrical architecture for the next generation of electric cars. This joint effort aims to decrease development costs and accelerate the scaling of new technologies.
The news was seen as a major win for Rivian, which has been facing significant revenue loss amid ongoing supplier issues that disrupt production and business growth. At the same time, the VW group has also been going through multiple challenges with EVs, especially in the North American market.
However, the VW Rivian joint venture benefits both companies: Volkswagen gains access to Rivian’s software for auto manufacturing, while Rivian secures a financial lifeline. A win-win situation!
“We’re thrilled to see our technology being integrated in vehicles outside of Rivian, and we’re excited for the future,” stated the CEO of Rivian, RJ Scaringe.
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Through the partnership, the VW group aims to drive consumer benefits by enhancing innovation and scalability and even decreasing costs for both suppliers. At the same time, this will also contribute to creating a more sustainable environment through the technology used and by reducing the overall expenditure.
“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. Today’s launch of the joint venture demonstrates the potential we want to leverage together in the coming years.” – stated the CEO of Volkswagen Group, Oliver Blume.
The joint venture will use the current electrical software from Rivian Cars to launch the R2 model by early 2026 while also supporting the expected debut of the VW Group’s first models by 2027.
By
Eva Robinson
•
November 13, 2024 2:00 PM
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