Volkswagen to Invest Up to $5 Billion in Rivian

 Two electric car majors – Rivian Automotive and Volkswagen Group – on Tuesday announced plans to form an equally controlled and owned joint venture (JV), which is expected to be completed in the fourth quarter of 2024, to create next-generation electrical architecture and best-in-class software technology.

Underpinned by the vision of this partnership, Volkswagen plans to invest $5 billion into Rivian. Initially Volkswagen Group will invest $1 billion in Rivian through an unsecured convertible note that will convert into Rivian’s common stock subject to certain conditions upon the later of receipt of regulatory approvals and 1 December 20241. Volkswagen Group is expected to invest a further $4 billion later.

The partnership is anticipated to accelerate the development of software for Rivian and Volkswagen Group. It is expected to allow both companies to combine their complementary strengths and lower cost per vehicle by increasing scale and speeding up innovation globally.

Rivian’s proven in-market zonal hardware design and integrated technology platform are expected to serve as the foundation for future software-defined vehicles (SDV) development in the JV that will be applied to both companies’ vehicles. Rivian plans to contribute its electrical architecture expertise and is expected to license existing intellectual property rights to the JV.

Both companies aim to launch vehicles benefiting from the technology created within the joint venture in 2925 and in the short term, the JV is expected to enable Volkswagen Group to utilise Rivian’s existing electrical architecture and software platform.

Beneficial to Customers

Volkswagen Group CEO Oliver Blume said that their customers benefit from the 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. We are also acting in the best interest of our strong brands, which will inspire with their iconic products. The partnership fits seamlessly with our existing software strategy, our products, and partnerships. We are strengthening our technology profile and our competitiveness,” Blume said.Rivian’s founder and CEO RJ Scaringe said that since the earliest days of Rivian, they have been focused on developing highly differentiated technology.

“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,” Scaringe added.