Rivian, Volkswagen Group announce new joint ventures into EV tech
Rivian and Volkswagen Group announced on Tuesday the two companies would be working on a joint venture to develop next-generation electrical architecture and best-in-class software technology.
Both companies will have an equal stake in the new joint venture, which aims to lower costs per vehicle through increased scale and faster innovation on a global scale.
The goal is to use Rivian’s hardware design and integrated technology platform as the foundation and to develop vehicles during the second half of the decade. In the short term, Volkswagen Group will utilize Rivian's existing electrical architecture and software platform.
Rivian and Volkswagen Group’s joint venture
Each company will continue to operate their respective vehicle businesses separately.
Oliver Blume, CEO of Volkswagen Group, stated: "Our customers will benefit from this 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 a lower cost. This partnership aligns seamlessly with our existing software strategy, products, and partnerships, strengthening our technology profile and competitiveness."
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 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. This partnership will not only bring our software and zonal architecture to a broader market through Volkswagen Group’s global reach but also help secure our capital needs for substantial growth. Rivian was created to help the world transition away from fossil fuels through compelling products and services, and this partnership aligns beautifully with that mission."
Volkswagen Group plans to invest $5 billion in Rivian, starting with an initial $1 billion investment through an unsecured convertible note. This note will be converted into Rivian’s common stock upon meeting certain conditions, expected by December 1. An additional $4 billion investment is planned as part of the transaction.
Extensive work has been done over the past months to ensure compatibility between Rivian’s electrical architecture and Volkswagen Group’s vehicles.
Rivian in Georgia
The new joint venture is good news for those impacted by the halting of a $5 billion production facility in Georgia back in March.
Rivian made that announcement the month after a major round of layoffs.
The company started the process of grading the 2,000-acre site for construction last year and previously planned to break ground in early 2024.
The decision to build the plant in Georgia was announced in 2021. It was projected to employ approximately 7,500 workers. It would have been the largest industrial plant in Georgia if it had been built.
More than two months after pausing the Georgia facility, Rivian announced it would be expanding its Illinois plant.