Volkswagen Group, Rivian Set To Form A Joint Venture

The Volkswagen Group and Rivian have announced that they intend to form a joint venture (JV) to create the next generation of electric vehicle (EV) architecture as well as software. Volkswagen will invest around $5 billion (roughly ₹41,785 crore) in Rivian as a part of the deal. 

The first $1 billion (roughly ₹8,357 crore) will be invested in Rivian through an unsecured convertible note that will change Rivian’s common stock. However, this depends on regulatory approvals by December 1, 2021. 

With this JV, both companies will help lower the cost of their EVs through economies of scale and speeding up innovation. Rivian will provide its hardware design and integrated technology platform that will serve as the basis of future software-designed vehicles developed as a part of the JV. Rivian said it plans to contribute its expertise in EV architecture and could license its intellectual property rights to the JV. 

Vehicles from this JV will start rolling out before 2030. However, the short-term goal of the JV is to provide the Volkswagen Group with Rivian’s existing EV architecture and software platform. Outside the JV, both companies will operate separately. 

Oliver Blume, CEO, Volkswagen Group said, “Through our cooperation, we will bring the best solutions to our vehicles faster and at a lower cost. The partnership fits seamlessly with our existing software strategy, our products, and our partnerships. We are strengthening our technology profile and our competitiveness."

RJ Scaringe, Founder and CEO, Rivian said, “Not only is this partnership expected to bring our software and associated zonal architecture to an even broader market through Volkswagen Group’s global reach, but this partnership also is expected to help secure our capital needs for substantial growth.”