Rivian Automotive and Volkswagen Group entered into a transaction agreement to create their new joint venture (JV) called Rivian and VW Group Technology, LLC, known as Rivian and Volkswagen Group Technologies – with a total deal size of up to $5.8 billion, which is expected to start today.
Through this JV, the companies plan to bring next-generation electrical architecture and advanced software technology for both companies’ future electric vehicles, covering all relevant vehicle segments, including subcompact cars. It is highly complementary, reflecting Rivian’s industry-leading software and electrical hardware technology as well as Volkswagen Group’s significant global scale and industry-leading vehicle platform competencies.
This joint venture will be headed by Wassym Bensaid (Rivian) and Carsten Helbing (Volkswagen Group). And developers and software engineers from these companies will join the joint venture. The teams will be based in Palo Alto, California initially, and three other sites are in development in North America and Europe. By combining their complementary expertise, the two companies plan to reduce development costs and scale new technologies more quickly. The goal is to be able to offer customers the best technological solution as early as possible.
This JV will aim to use the existing Rivian electrical architecture and software technology stack, enabling the launch of Rivian’s R2 in the first half of 2026 and support the expected launch of the first models from the Volkswagen Group as early as 2027.
This JV will evolve this modular and flexible electrical architecture. And it will also scale the technology across a wide range of price points and international markets, creating a path for new generations of high-volume vehicles that are fully capable of advanced automated driving functions and can integrate over-the-air updates (OTA) and upgrades. The customers will regularly receive new software updates, increasing the added value throughout the entire lifecycle of the vehicle.
Teams at both companies have already successfully demonstrated the potential of their collaboration. In just twelve weeks, the team developed an initial drivable demonstrator vehicle. A Volkswagen Group vehicle has been retrofitted to run on Rivian’s proven in-market zonal hardware design and integrated technology platform. And the drivable demonstrator vehicle not only highlights the scalability and integration capabilities of both companies, but it also further proves the concept for the joint venture.
Volkswagen Group plans to invest up to $5.8 billion in Rivian and the joint venture by 2027 and An initial investment of $1 billion in the form of a convertible note has already been made. At closing of the joint venture, Volkswagen Group will invest about $1.3 billion as consideration for background IP licenses and a 50% equity stake in the joint venture.
The investments also balance part of lower future costs identified during the technical feasibility tests and the sharing of costs for the inclusion of selected Volkswagen MEB models. And the remaining investment of up to $3.5 billion is expected to come in the form of equity, convertible notes, and debt at future dates and based on clearly defined milestones. More investments are tied to clear operational, technical, and financial milestones. The joint venture will operate as an independent company.
With the partnership, Volkswagen Group aims to strengthen consumer benefits surrounding innovation, scalable platform and cost savings potential for both sides, as well as enhancing its R&D cost efficiency and thus sustainably reduce overall expenditure in this area.
KEY QUOTES:
“The partnership with Rivian is the next logical step in our software strategy. With its implementation, we will strengthen our global competitive and technological position. Today’s launch of the joint venture demonstrates the potential we want to leverage together in the coming years. We have a clear plan to offer our customers the best products and digital experiences at attractive prices through state-of-the-art development processes, innovative technological approaches, and a competitive cost base driven by synergies.”
– Oliver Blume, CEO of Volkswagen Group
“Today’s finalization of our joint venture with Volkswagen Group marks an important step forward in helping transition the world to electric vehicles. We’re thrilled to see our technology being integrated in vehicles outside of Rivian, and we’re excited for the future. Rivian will continue to stay focused on creating best in class products and services that benefit our customers, helping to drive EV adoption.”
– RJ Scaringe, Founder and CEO of Rivian
“We have made a successful start. Over the past few months, we’ve created the framework for bringing together the JV teams and pooling our resources. We are thrilled with the rapid progress we have achieved in the preparatory phase. This has laid the foundation for our future success.”
– Carsten Helbing, designated future co-CEO of the joint venture
“We’re excited to have entered into this joint venture, and welcome colleagues from both Rivian and Volkswagen Group to our new venture. The aim of the joint venture is to speed up innovation, increase scale and lower the cost of owning an EV for millions of people around the world. I’m hugely impressed by the work done already. While the demonstrator vehicle only scratches the surface of what is possible, it’s incredibly exciting to see what is possible when a new OEM and a legacy automaker work closely together.”
– Wassym Bensaid, co-CEO of the joint venture
