Rivian and Volkswagen entered into a joint venture to create electric architecture and software for next-generation software defined vehicles.
The company, Rivian and Volkswagen Group Technologies, has VW slated to invest up to $5.8 billion in Rivian and the joint venture by 2027. An initial investment of $1 billion in the form of a convertible note has already been made. At closing of the joint venture, Volkswagen Group will invest about $1.3 billion as consideration for background IP licenses and a 50 percent equity stake.
The remaining investment is expected to come in the form of equity, convertible notes, and debt at future dates and based on clearly defined milestones. The joint venture will operate as an independent company.
Next-Generation EVs
Rivian and Volkswagen Group Technologies plan to bring next-generation electrical architecture and best-in-class software technology for both companies’ future electric vehicles, covering all relevant vehicle segments, including subcompact cars. Company officials highlighted Rivian’s industry-leading software and electrical hardware technology combing with Volkswagen’s global scale and industry-leading vehicle platform competencies.
The joint venture will be headed by Wassym Bensaid (Rivian) and Carsten Helbing (Volkswagen Group). Developers and software engineers from both companies will join the joint venture, which will be based in Palo Alto, CA initially with three other sites are in development in North America and Europe.
By combining their complementary expertise, the two companies plan to reduce development costs and scale new technologies more quickly, according to Rivian and VW leaders. The goal is to be able to offer customers the best technological solution as early as possible.
CEO Comments
“The partnership with Rivian is the next logical step in our software strategy. With its implementation, we will strengthen our global competitive and technological position,” said Oliver Blume, CEO of Volkswagen Group. “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.”
RJ Scaringe, founder and CEO of Rivian, added “today… 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.”
The JV will 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.
Working Group Results
The JV will evolve this modular and flexible state-of-the-art electrical architecture as it scales the technology across a wide range of price points and international markets, paving the way for new generations of high-volume vehicles that are fully capable of advanced automated driving functions and can integrate over-the-air updates (OTA) and upgrades. Customers will regularly receive new software updates, increasing the added value throughout the entire lifecycle of the vehicle.
Officials noted the group has already successfully demonstrated the potential of their collaboration. In just three months since the initial working group came together a Volkswagen vehicle has been retrofitted to run on Rivian’s proven in-market zonal hardware design and integrated technology platform.
“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,” stated Rivian’s Bensaid. “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.”
Benefits for Volkswagen
Through the partnership, Volkswagen Group aims to strengthen consumer benefits surrounding innovation, scalable platform and cost savings potential for both sides, as well as enhancing its R&D cost efficiency and thus sustainably reduce overall expenditure in this area.
VW’s Helbing said the drivable demonstrator vehicle not only highlights the scalability and integration capabilities of both companies, but it further proves the concept for the joint venture.
“We have made a successful start,” said Helbing. “Over the past few months, we’ve created the framework for bringing together the JV teams and pooling our resources. We are thrilled with the rapid progress we have achieved in the preparatory phase. This has laid the foundation for our future success.”
