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Rivian and Volkswagen Group have announced plans for a joint venture to develop next-generation software-defined vehicle (SDV) platforms. Volkswagen Group will invest an initial $1 billion in Rivian, with a potential additional investment of up to $4 billion. This strategic partnership aims to leverage Rivian’s advanced software and electrical architecture to enhance both companies’ electric vehicle offerings.
Key Highlights:
- Joint Venture Announcement: Rivian and Volkswagen Group plan to create a joint venture focused on developing cutting-edge SDV platforms for their future electric vehicles.
- Initial Investment: Volkswagen Group will invest an initial $1 billion in Rivian, with the potential for an additional $4 billion, bringing the total expected deal size to $5 billion.
- Technology Integration: The joint venture will build on Rivian’s industry-leading software and electrical architecture, aiming to create a best-in-class SDV technology platform.
- Accelerated Development: The partnership is expected to accelerate software development for both companies, combining their strengths and reducing costs per vehicle through increased scale and innovation.
- Future Vehicle Launches: Both companies plan to launch vehicles utilizing the joint venture’s technology in the second half of the decade.
Strategic Benefits:
Market Expansion: The partnership is expected to help Rivian’s software and zonal architecture reach a broader market through Volkswagen Group’s global presence.
Cost Efficiency: By leveraging each other’s strengths, both companies aim to lower costs per vehicle and speed up the innovation process.
Technological Advancements: The JV will enable Volkswagen Group to utilize Rivian’s existing electrical architecture and software platform, expediting its SDV plans and transition to a pure zonal architecture.
Leadership Perspectives:
Oliver Blume, CEO of Volkswagen Group, stated, “Our customers benefit from the targeted partnership with Rivian to create a leading technology architecture. Through our cooperation, we will bring the best solutions to our vehicles faster and at lower cost.”
RJ Scaringe, Founder and CEO of Rivian, added, “We’re very excited to be partnering with Volkswagen Group. Since the earliest days of Rivian, we have been focused on developing highly differentiated technology, and it’s exciting that one of the world’s largest and most respected automotive companies has recognized this.”
Investment Details:
Volkswagen Group’s investment in Rivian will initially involve a $1 billion unsecured convertible note, converting into Rivian’s common stock under certain conditions. An additional investment of up to $4 billion is planned, split into two tranches of $1 billion each in 2025 and 2026.
The joint venture’s formation is expected to be completed by the fourth quarter of 2024, pending regulatory approvals. Lazard is serving as lead financial advisor, and BDT & MSD Partners as financial advisor to Rivian.
About Rivian
Rivian (NASDAQ: RIVN) is an American automotive manufacturer known for its innovative electric vehicles and accessories. Committed to accelerating the global transition to zero-emission transportation, Rivian builds its vehicles in the United States and offers a full suite of lifecycle services.
About Volkswagen Group
Volkswagen Group, headquartered in Wolfsburg, Germany, is one of the world’s leading car makers. With a global presence and a strong portfolio of brands, the Group is dedicated to shaping the future of mobility through investments in electric and autonomous driving vehicles, digitalization, and sustainability.
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