VW, Rivian launch $5.8bn Silicon Valley joint venture
Volkswagen has today launched its $5.8bn joint venture with US startup Rivian Automotive to develop software and electronics architectures for its next generation electric vehicle platforms.
The two companies are providing engineers to the joint venture, Rivian and Volkswagen Group Technologies in Palo Alto, California, which will be co-led by Wassym Bensaid of Rivian and Carsten Helbing of the Volkswagen Group.
Three other sites are in development in North America and Europe. By combining expertise, the two companies plan to reduce development costs and scale new technologies more quickly.
Engineers from both companies have already ported the Rivian software to a driveable VW demonstrator.
VW previously spun out its software business into Cariad which has 300 engineers in Silicon Valley and had a deal with Ford on the co-development of EV platforms that finished in 2022.
The JV will supply both companies with next-generation electrical architecture and software stack for future electric vehicles from both companies across all vehicle segments, including subcompact cars.
The JV will aim to use the existing Rivian electrical architecture and software technology stack, enabling the launch of Rivian’s R2 in the first half of 2026 and support the expected launch of the first models from the Volkswagen Group as early as 2027.
The JV will evolve this modular and flexible electrical architecture and scale it across a wide range of price points and international markets with advanced automated driving functions and can integrate over-the-air updates (OTA) and upgrades.
The initial drivable demonstrator saw a VW vehicle retrofitted to run on Rivian’s in-market zonal hardware design and integrated technology platform in 12 weeks. The drivable demonstrator vehicle not only highlights the scalability and integration capabilities of both companies, but it also further proves the concept for the joint venture.
“Today’s finalization of our joint venture with Volkswagen Group marks an important step forward in helping transition the world to electric vehicles. We’re thrilled to see our technology being integrated in vehicles outside of Rivian, and we’re excited for the future. Rivian will continue to stay focused on creating best in class products and services that benefit our customers, helping to drive EV adoption,” said RJ Scaringe, Founder and CEO of Rivian.
“The partnership with Rivian is the next logical step in strengthening our global competitive and technological position,” said Oliver Blume, CEO of the Volkswagen Group. “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. 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.”
Carsten Helbing, designated future co-CEO of the joint venture, said: “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. This has laid the foundation for our future success.”
Wassym Bensaid, co-CEO of the joint venture, said: “We’re excited to have entered into this joint venture, and welcome colleagues from both Rivian and Volkswagen Group to our new venture. 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.”
An initial investment of $1 billion in the form of a convertible note has already been made and at closing of the Joint Venture, VW invest about $1.3 billion for background IP licenses and a 50% equity stake in the joint venture. These investments also balance part of lower future costs identified during the technical feasibility tests and the sharing of costs for the inclusion of selected Volkswagen MEB models.
The remaining investment of up to $3.5 billion is expected to come in the form of equity, convertible notes, and debt at future dates and based on clearly defined milestones.
www.volkswagen-group.com; www.rivian.com
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