VW To Invest Billions In Rivian With New Joint Venture

by Chris Teague

Published: June 26th, 2024

vw to invest billions in rivian with new joint venture

Rivian started life with significant investments from Ford, Amazon, and others, but the automaker has struggled with profitability in recent times. However, while it has delayed investments in new production facilities and conducted layoffs to cut costs, Rivian is still burning through its cash reserves. Volkswagen could be the one to save the day, as it recently announced a joint venture with the automaker that will inject $1 billion into its operations to start.

The partnership could net Rivian as much as $5 billion over time, giving it the much-needed funding required to develop and build its upcoming R2 and R3 vehicles. Volkswagen will gain access to Rivian’s advanced technologies, which will help it overcome some of the challenges it has had with its CARIAD software division. VW and Rivian also said they would work together to develop next-generation vehicle architectures.

VW Group CEO Oliver Blume said, “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.”

The initial $1 billion investment could swell with another $4 billion spread out over the next few years. Payments are contingent upon Rivian meeting “certain milestones,” but we don’t yet know what they are.

[Images: Rivian, VW]

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#Volkswagen #Rivian #JointVenture

Chris Teague

Chris grew up in, under, and around cars, but took the long way around to becoming an automotive writer. After a career in technology consulting and a trip through business school, Chris began writing about the automotive industry as a way to reconnect with his passion and get behind the wheel of a new car every week. He focuses on taking complex industry stories and making them digestible by any reader. Just don’t expect him to stay away from high-mileage Porsches.

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3 of 17 comments

28-Cars-Later 4 days ago

This is an opposite of common sense take, but given VAG is now saddled with UAW, and Rivian AFAIK is in Illinois meaning conceivably it too will captured, are Zee Germans trying to somehow embrace UAW in a long term strategy? Could the Feds still have their nuts in a vise from Dieselgate?

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- SCE to AUX 3 days ago
  
  It's more like VW is buying software that works, since their software group can't do it.
  https://www.theautopian.com/why-vws-5-billion-rivian-investment-is-a-terrible-omen-for-automakers/
  
  Like
3SpeedAutomatic 2 days ago
VW & Rivian

There’s more than what meets the eye in this investment:
- VW gets EV software which is superior to what it offers today in its own EVs
- VW sales in China have plateaued. This gives VW something to offer the Chinese market as a foil to Tesla
- VW could develop Rivian stores with customer service & support enhancing the Rivian experience as compared to Tesla’s apprehensive post delivery cringe
- VW can use the Rivian underpinnings as the bases of its Scout EV as well as a Travelall EV to counter Hummer & Cadillac EVs
- The Chinese EV wave is coming to North America. An inexpensive EV Beetle type could be developed off the existing Rvian or VW EV platforms to counter the title wave. Don't laugh, Chrysler did something similar with the Neon of the 90's.
- The Rivian Electric Delivery Van (EDV) is already developed and in production. This van is needed by both Amazon & VW as emission offsets towards carbon neutral.
- The EDV has scale in cargo capacity and could be sourced to other delivery providers (FedEx, USPS, etc), as part of their offset programs.
- Rivian provides an existing 2nd EV platform to leverage technology at a fraction of the cost to develop such a platform from scratch.
If VW plays the long game and leverages the technology, it will come out ahead in a major transition in automobile development. 🚗🚗🚗
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