Volkswagen Group (VW) and Rivian have announced plans to establish a 50:50 joint venture (JV) to develop software technology and next-generation electrical/electronic (E/E) architecture. As part of this collaboration, VW Group will invest up to USD 5 billion in Rivian, starting with an initial investment of USD 1 billion, followed by up to USD 4 billion in additional funding.

VW and Rivian team up to form a joint venture, VW to invest up to USD5 billion into Rivian

The JV

Under the terms of the JV, Rivian will license its existing E/E architecture and vehicle software, making it immediately available to VW. The two companies will then collaborate on developing the next generation of E/E architecture and software stack for software-defined vehicles (SDVs).

With the JV structured as a 50:50 partnership, it will be led by two co-CEOs, one appointed by each company. The Rivian co-CEO will serve as the JV’s Chief Technology Officer (CTO), while the VW co-CEO will also take on the role of Chief Operating Officer (COO).


Of the total USD 5 billion investment, USD 3 billion will be directed straight to Rivian by 2026, and USD 2 billion will go towards the JV. The JV is expected to be established by Q4 2024.

Rivian will receive USD 1 billion each year starting this year through to 2026, making VW a substantial shareholder in the company. However, the completion of these payments is contingent upon certain milestones being met.

The JV will receive USD 1 billion at the end of 2024 and will have the option to take a USD 1 billion loan in 2026.

What it means for VW

VW plans to release its first model using the jointly developed technologies before 2030. The first VW EV released on its in-house developed Scalable Systems Platform (SSP) is set to debut in 2028. However, it now appears that VW will use an adapted version of Rivian’s E/E architecture in its SSP-based EVs.

In addition to using Rivian’s platform, VW has cancelled the development of its E3 2.0 software platform, which it had initially planned to use in these vehicles, instead it plans to use the co-developed software from the JV.

Rho’s evaluation, a lifeline for Rivian

Rivian is one of many EV start-ups that has felt a squeeze in the last few years. In 2023, it recorded a net loss of USD4.4 billion and delivered just over 50,000 vehicles. This was over double its 2022 sales figures. In Q1 this year Rivian delivered 13,588 vehicles, a 71% increase on the same period in 2023. Although it is experiencing growth it is still heavily reliant on funding to produce and sell its vehicles.

Rho Motion Research Analyst, Geroge Whitcombe, commented, “The partnership itself is interesting. We’ve been discussing for a long time how vital software is for EVs in China. This partnership, however, underscores the significance of software in EVs universally and that software is becoming a significant factor in the consumer decision making process when buying a new car. Even the structure of the JV, with the Rivian co-CEO serving as the CTO, highlights the software gap between legacy OEMs and pure EV players, who are to some extent software companies as well as automotive ones.”

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Image credit: Adobe Stock

Sources: VW Group

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