Collaborative Announcement of Electric Vehicle Technology Partnership Worth $5.8 Billion by Rivian and Volkswagen
Rivian and Volkswagen Group Announce Joint Venture to Accelerate Electric Vehicle Adoption
In a significant move to drive the electric vehicle (EV) industry forward, Rivian and the Volkswagen Group have announced a joint venture aimed at developing next-generation global software and electrical architecture for EVs. The joint venture, named Rivian and Volkswagen Group Technologies, is valued at $5.8 billion and will have teams of engineers and developers from both companies.
The joint venture's headquarters will be in Palo Alto, California. The collaboration, backed by over $5 billion in investment, aims to create advanced, integrated EV technologies that support both companies' future electric vehicle platforms.
One of the key goals of the joint venture is to develop a unified software and electrical (E/E) architecture that can serve as a foundation for a wide range of electric vehicles globally, improving scalability and efficiency in the production of EVs. This architecture will support advanced driver assistance, over-the-air (OTA) updates, and modular technology upgrades throughout a vehicle's lifetime.
Rivian founder and CEO RJ Scaringe sees the collaboration as a significant milestone for the company. He emphasised that the joint venture isn't just about creating vehicles; it's about crafting a flexible and scalable EV platform. Volkswagen Group CEO Oliver Blume views the partnership as a "natural step" in VW's software ambitions.
The joint venture will focus on supercharging electric vehicle technology. Anticipated outcomes include sharing and advancing proprietary technologies to reduce costs and enhance performance. For example, Rivian’s in-house developed electric motors like the Enduro and Maximus motors, and battery innovations, which have enabled around a 30% cost saving over previous versions, will be leveraged.
Further investments are tied to development milestones. Volkswagen is committing up to $5.8 billion to the joint venture through 2027. The initial investment is $1 billion in the form of convertible notes. Volkswagen will invest about $1.3 billion for intellectual property licenses and a 50% equity stake at launch.
The joint venture isn't just about short-term gains. Both companies plan to take their joint platform global. Rivian's R2 is expected to launch by 2026, and Volkswagen's own first models are planned to hit the market as early as 2027.
Additional R&D sites in North America and Europe are planned for the joint venture. The joint venture will begin operations on November 13, 2022. The partnership's purpose is to co-develop cutting-edge EV electrical and software architectures that allow both firms to accelerate the rollout of competitive electric vehicles, reduce production costs, and maintain technological leadership while carefully managing IP protection. This collaboration is expected to underpin scalable EV platforms and enable more efficient manufacturing lines for future models from both companies.
- The joint venture, named Rivian and Volkswagen Group Technologies, aims to develop advanced, integrated EV technologies that will not only support both companies' future electric vehicle platforms but also potentially extend to other industries such as transportation and automotive.
- The collaboration is valued at $5.8 billion and will include teams of engineers and developers from both Rivian and the Volkswagen Group, working together to create a unified software and electrical architecture for electric vehicles.
- The joint venture's anticipated outcomes include leveraging Rivian’s proprietary technologies, like the Enduro and Maximus motors, and battery innovations to reduce costs and enhance performance, contributing to the finance and profitability of the partnership.
- The joint venture's purpose is to maintain technological leadership, reduce production costs, and accelerate the rollout of competitive electric vehicles in the global market, which could significantly impact the future of lifestyle and technology in the electric vehicle industry.
