Volkswagen Group to make up to $5bn investment in Rivian for software help | CAR Magazine

Volkswagen Group to make up to $5bn investment in Rivian for software help

Published: 26 June 2024 Updated: 26 June 2024

► Volkswagen invests in US EV maker Rivian
► In return, both companies will develop new software
► A total of $5bn to be invested

Volkswagen and Rivian have announced a joint venture to develop software for next-generation vehicles.

VW Group will first invest $1bn in Rivian, ‘with up to $4bn in planned additional investment,’ and the joint venture is designed to ‘create next-generation electrical architectures and best-in-class software technology.

The move consists of a lot of money for Volkswagen but makes sense for both brands. Rivian is currently under some financial pressure; the US-based electric car brand announced it would have to lay off 10 per cent of its salaried workforce in 2024, with the Financial Times reporting that it projected no production growth this year.

For Volkswagen, enlisting the help of an super switched-on start-up outsider like Rivian (known by many in the industry to have created much of its own slick software) could help it out of its own CARIAD-shaped software hole. The Group has been hampered by software and UX issues for some years now, including the MIB3 infotainment debacle and the much-delayed PPE platform that dented the rollout of its ID cars and wider group models like the Audi Q6 e-Tron respectively.

So much so that, in a statement from Rivian, the announcement includes a line about the joint venture allowing ‘Volkswagen Group to utilise Rivian’s existing electrical architecture and software platform’ in the short term. Funny, that.

In the mid-to-long term, the fruits of the joint venture mean that both brands can accelerate their software development, and ‘it is expected to allow both companies to combine their complementary strengths and lower costs per vehicle by increasing scale and speeding up innovation.’ Both companies ‘aim to launch vehicles benefitting from the technology created in the second half of the decade.’

RJ Scaringe, founder and CEO of Rivian said in the statement: ‘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.’

‘The partnership fits seamlessly with our existing software strategy, our products, and partnerships,’ says VW Group CEO, Oliver Blume. ‘We are strengthening our technology profile and our competitiveness.’

It’s not the first time Volkswagen Group has looked to external help in furthering its development goals. In February 2024, it announced that it would enter into an agreement with Chinese car maker Xpeng, makers of the G6 that’s launching in Europe, to develop two ‘smart e-cars’ (pictured above) for the Chinese market.

By Jake Groves

CAR's deputy news editor, gamer, serial Lego-ist, lover of hot hatches