VW taps Rivian to solve its software woes

VW taps Rivian to solve its software woes

Business news |
By Nick Flaherty

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Volkswagen is set up a joint venture for software defined vehicles (SDV) with electric vehicle startup Rivian in a $5bn deal.

VW will invest $3bn into Rivian over the next three years, and up to $2bn in the SDV joint venture which will be jointly owned and controlled by the two companies. This will build on Rivian’s software and electrical architecture to create a software-defined vehicle technology platform.

This was the objective of VW’s software spinout Cariad, which has struggled to deliver effective software. VW also has a deal with Ford to share EV platforms.

There has been significant work done over the past months to validate that Rivian’s electrical architecture and software are compatible with Volkswagen Group’s vehicles. The parties currently expect the completion of the JV formation in the fourth quarter of 2024 subject to regulatory approvals.

The partnership is anticipated to accelerate the development of software for Rivian and Volkswagen Group to lower the 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 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 joint venture.

In the short term, the joint venture is expected to enable Volkswagen Group to utilize 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. Each company will continue to separately operate their respective vehicle businesses.

Both companies aim to launch vehicles benefiting from the technology created within the joint venture in the second half of the decade. Rivian plans to launch its next generation R2 electric SUV in 2027, followed by the R3.

“Since the earliest days of Rivian, we have been focused on developing highly differentiated technology, and it’s exciting that one of the world’s largest and most respected automotive companies has recognized this. 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,” said RJ Scaringe, Founder and CEO of Rivian.

“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,” said Oliver Blume, CEO of Volkswagen Group.


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