Rivian, VW Group announce JV for next-gen EV architecture, software technology

Rivian Automotive and Volkswagen Group are forming an equally controlled and owned joint venture (JV) to create next-generation electrical architecture and best-in-class software technology for the future products from both the companies. 

The partnership is expected to allow the companies to combine their complementary strengths and lower cost per vehicle by increasing scale and speeding up innovation globally. 

Rivian's proven in-market zonal hardware design and integrated technology platform are expected to serve as the foundation for future SDV development in the JV that will be applied to both companies' vehicles. 

The electric-only brand plans to contribute its electrical architecture expertise and is expected to license existing intellectual property rights to the joint venture. The brands aim to launch vehicles benefiting from the technology created within the JV in the second half of the decade. 

On the other hand, in the short term, the JV is expected to enable Volkswagen Group to utilize Rivian's existing electrical architecture and software platform. 

The partnership's ambition is to accelerate Volkswagen Group's SDV plans and transition to a pure zonal architecture. Each company will continue to separately operate their respective vehicle businesses, the companies clarified. 

Oliver Blume, CEO of Volkswagen Group, commented on the partnership, "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".

"We are also acting in the best interest of our strong brands, which will inspire with their iconic products. The partnership fits seamlessly with our existing software strategy, our products, and partnerships. We are strengthening our technology profile and our competitiveness", he added.

As part of its strategic partnership, Volkswagen Group plans to make a $5 billion investment into Rivian. Initially the German automotive house will invest $1 billion in Rivian through an unsecured convertible note that will convert into Rivian's common stock. Volkswagen Group is expected to invest a further $4 billion as part of the transaction.

"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", said RJ Scaringe, Founder and CEO of Rivian.

"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. Rivian was created to help the world to transition away from fossil fuels through compelling products and services, and this partnership is beautifully aligned with that mission", he added.

Engineers of the partnering companies have significantly worked over the past months to validate the compatibility of Rivian's electrical architecture and software with Volkswagen Group's vehicles. The parties currently expect the completion of the JV formation before the end of the year.