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A joint venture between German automaker Volkswagen and EV startup Rivian could go even deeper than the companies previously indicated.
In June, the two companies announced plans to form a $5 billion JV to develop connected-vehicle software. Now, according to a November 12 update, the companies are taking things even further with the establishment of an independent company and plans for VW to boost its investment in the venture to $5.8 billion.
“It helps both of the companies, because Rivian is in need of cash and Volkswagen is definitely in need of software,” Sam Fiorani, VP of global vehicle forecasting at AutoForecast Solutions, told Tech Brew.
The news comes ahead of what is likely to be an even more difficult period for EV makers, as a second Trump administration appears poised to slow electrification efforts.
The companies said the JV would deliver next-gen electrical architecture and “best-in-class software technology” for both companies’ future EVs, spanning “all relevant vehicle segments, including subcompact cars.” Overall, the goal is to drive down development costs and enable the companies to scale new tech faster.
- The venture will be led by Wassym Bensaid, Rivian’s chief software officer, and Carsten Helbing, VW Group’s chief technical officer.
- The JV will be headquartered in Palo Alto, with three additional sites in North America and Europe planned.
- The team developed a demonstration VW vehicle retrofitted with Rivian’s zonal hardware and tech platform in just 12 weeks.
The JV will use Rivian’s electrical architecture and tech to support the launch of the startup’s second-gen vehicle lineup in the first half of 2026. Next, it’ll support the launch of VW vehicles “as early as 2027.” Eventually, the JV’s advancements could be applied to a range of vehicles, including to VW’s forthcoming Scout EVs.
The partnership is being finalized at a crucial time for Rivian, which reported a $1.1 billion net loss in Q3. Thanks to some supply-chain struggles, the startup lowered its 2024 production forecast from 57,000 vehicles to between 47,000 and 49,000.
Rivian is trying to improve its cost structure with both a second-gen version of its R1 lineup and its forthcoming R2 lineup. VW is undertaking a major cost-cutting initiative in Europe amid challenging market dynamics, even as it tries to boost its standing in the US EV market.
“We believe this is the right partner announcement, coming in at the right time as Rivian looks to navigate the ship in stormy water with sufficient capital to fund its EV roadmap over the coming years,” Wedbush Securities analysts wrote in a note.