Electric vehicle maker Rivian has announced a major partnership with Volkswagen, with the German automaker investing up to $5 billion into the company. The two companies will also be forming a joint venture to develop an automotive software platform based on Rivian technology. This collaboration will not only help Rivian reduce some of its component and materials costs but also position the company to better compete with Tesla.
Shares of Rivian rose about 9% on Tuesday and jumped more than 50% in after-hours trading following the announcement of the partnership. Volkswagen Group CEO Oliver Blume stated that the initial investment in Rivian will be $1 billion, with plans for further investments of up to $4 billion by 2026, assuming specific technical milestones are met. This financial support will ensure that Rivian can launch its next products, the R2 electric SUV and R3 crossover, on time and resume construction of its Georgia plant.
The partnership between Rivian and Volkswagen will focus on integrating infotainment, wireless connectivity, and autonomous driving functions, among other things. The new software platform, based on Rivian’s “zonal” hardware design and integrated technology platform, will be shared by both companies. Rivian CEO RJ Scaringe emphasized the mutual benefit of the collaboration, highlighting the scale and portfolio of brands that Volkswagen brings, as well as the potential for cost savings and technology acceleration.
In addition to the financial investment, Volkswagen’s support will also help Rivian better position itself in the increasingly competitive electric vehicle market. The collaboration with one of the world’s biggest automakers, combined with its existing relationship with Amazon, its largest investor and top buyer of electric delivery trucks, will provide Rivian with the resources and support needed to succeed. The partnership will also enable Rivian to pivot its business model towards operating a robotaxi business, aligning it with Tesla’s strategy.
The 50-50 tech venture between Rivian and Volkswagen is a significant step towards achieving mutual goals in the electric vehicle market. The new software platform will leverage Rivian’s innovative technology to enhance features such as infotainment, wireless connectivity, and autonomous driving. With the support and investment from Volkswagen, Rivian is well-positioned to accelerate the development and deployment of its electric vehicles, competing directly with industry leaders like Tesla.
Overall, the partnership between Rivian and Volkswagen represents a significant opportunity for both companies to drive innovation and growth in the electric vehicle market. By leveraging each other’s strengths and resources, the collaboration will not only benefit Rivian in terms of financial support and technology development but also position the company as a key player in the industry. With the combined expertise and investment from Volkswagen and the ongoing support from Amazon, Rivian is poised for a successful future in the rapidly evolving electric vehicle market.
