The two will share EV software technology, but will otherwise remain rivals on the showroom floor
- Volkswagen is stuffing US$5 billion into EV auto company Rivian over the next three years
- The two will form a joint venture that’ll primarily focus on software development
- While both will benefit from tech-sharing and volume-buying, they’ll compete as rivals
Volkswagen’s cash infusion won’t come all at once. It will put US$1 billion into Rivian right away, and then that same amount once the joint venture is established, which is expected to happen in the fourth quarter of 2024. Providing Rivian meets specific targets, Volkswagen will invest another US$1 billion in each of 2025 and 2026 to purchase stock; and then hand over a further US$1 billion in 2026 as a loan. The news of the investment initially sent Rivian’s stock soaring by some 50%, and the market value of the company rose to nearly US$6 billion.
R.J. Scaringe, founder and CEO of Rivian, told news outlets his company will be able to cut manufacturing costs through volume supplies of components and chips through Volkswagen. Both companies plan to use software developed through the joint venture, with the R2S being the first Rivian with it.
That is expected to also work in VW’s favour: Under its former CEO, it set up a software division called Cariad, but so far, it’s been behind schedule and over budget. As far as in-house software and integrated technology goes, Rivian definitely has the better product.
And now those, it seems, will use the joint-venture software — and then compete with the SUVs and pickup trucks that Rivian builds. The joint venture, at least for now, appears to be all about sharing intellectual property, and not about joining forces to actually bolt vehicles together.
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