Europe’s largest car manufacturer Volkswagen teams up with the US electric vehicle manufacturer Rivian. The companies want to develop car software in a joint venture. Volkswagen is expected to invest five billion dollars (4.67 billion euros) in Rivian and the joint venture, which is owned equally by both. “This is exciting,” wrote Rivian CEO RJ Scaringe (41) on the X and platform posted a photo
with Volkswagen boss Oliver Blume (56).
“The partnership is intended to accelerate the software development of the Volkswagen Group and Rivian,” said a statement from both companies on Tuesday evening. Rivian’s technology will form the basis for the software of future electric car models. “This will be used in vehicles from both companies” that are scheduled to come onto the market before 2030, VW explained. Volkswagen can also use the current Rivian technology in the short term for new models from the group brands. In this way, Volkswagen boss Blume could potentially solve current software problems in the development of new vehicles.
“Another nail in the coffin” for Cariad
Volkswagen has bundled its software development in its subsidiary Cariad, but it continues to struggle with problems. Because important software was not ready on time, the daughters, for example, had to Audi and Porsche The introduction of new models has now been postponed by around three years.
Stephen Reitman Bernstein, automotive analyst at the research house, commented that the new joint venture is “another nail in the coffin” for Cariad.
“Through our collaboration, we will bring the best solutions to our vehicles faster and at lower costs,” said Volkswagen boss Blume. “The partnership fits seamlessly into our existing software strategy (…). This will strengthen our technology profile and our Competitiveness.”
Volkswagen will be able to use the jointly developed software and electronics for all of the group’s brands. To what extent they also apply to VW’s new off-road vehicle brand Scout USA should be used, remained open. Flower had in China has already entered into a similar alliance with electric car newcomer XPeng. VW will use XPeng technology there and initially build two models together with the Chinese; Volkswagen also acquired a stake in the Chinese competitor. In China, VW is also having problems bringing new vehicles onto the market quickly. Competitors like XPeng and BYD are further ahead than the Germans, especially with their infotainment software.
VW is investing three billion euros directly in Rivian
Volkswagen could then use the current Rivian software, which has been further developed in the joint venture, primarily for its vehicles built and sold in Europe and America. The Wolfsburg car company is investing up to three billion euros in Rivian for Allianz. The company, founded in 2009, is worth around eleven billion dollars on the Nasdaq technology exchange, but is making billions in losses with its electric pickups and SUVs. Rivian shares shot up double digits after hours.
In a first step, VW will subscribe to a convertible bond worth one billion dollars, which will not be exchanged for Rivian shares until December at the earliest. Volkswagen wants to invest another billion dollars in Rivian shares in 2025 and 2026. Volkswagen is spending up to two billion dollars on the joint venture itself. Part of this will be due for licensing the Rivian software when it is founded, which is planned for the end of 2024.
Both could benefit from the partnership: Rivian needs fresh money to finance the development of the cheaper and smaller R2 off-road vehicle, which is scheduled to come onto the market in 2026. In view of the massive losses, the company is looking for new partners. The trading giant Amazon, with whom Rivian works closely, Recently, I didn’t want to inject any fresh money.
Rivian had therefore reduced production in order to save money.