Volkswagen to invest $5 billion in Rivian and form JV
German automotive giant Volkswagen will invest up to USD 5 billion in US electric vehicle manufacturer Rivian. The investment is part of a newly formed, and equally controlled, joint venture aimed at developing next-generation electrical architecture and software technology.
The partnership is anticipated to accelerate the development of software for Rivian and Volkswagen Group. It will allow both companies to combine their strengths and lower cost per vehicle by increasing scale and speeding up innovation.
Rivian's in-market zonal hardware design and integrated technology platform are expected to serve as the foundation for future SDV development in the JV that will be applied to both companies' vehicles, the companies disclose in a press release. Rivian also plans to contribute its electrical architecture expertise and license existing intellectual property rights to the joint venture.
At the same time, Volkswagen Group plans to make a USD 5 billion investment into Rivian. Initially, the German company will invest USD 1 billion in Rivian, with up to USD 4 billion in planned additional investment for a total expected deal size of $5 billion.
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, the joint venture is expected to enable the German automaker to utilise Rivian’s existing electrical architecture and software platform. The partnership’s ambition is to accelerate Volkswagen Group’s SDV plans and transition to a pure zonal architecture.
“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 lower cost." says Oliver Blume, CEO of Volkswagen Group in the press release. "The partnership fits seamlessly with our existing software strategy, our products, and partnerships. We are strengthening our technology profile and our competitiveness."
“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,” adds RJ Scaringe, Founder and CEO of Rivian.