EV manufacturer Rivian Automotive and Volkswagen Group (VW) have announced their intention to form an equally controlled and owned joint venture (JV) to create next-generation electrical architecture and software technology for software-define vehicles (SDVs).
The partnership is anticipated to accelerate the development of software for both companies. Rivian’s zonal hardware design and integrated technology platform will serve as the foundation for SDV development in the JV for the companies’ vehicles. Rivian says it plans to contribute its electrical architecture expertise and license existing intellectual property rights to the JV.
In the short term, the collaboration is expected to enable VW to use Rivian’s existing electrical architecture and software platform. The partnership’s longer-term ambition is to accelerate VW’s SDV plans and transition to a pure zonal architecture. Each company will continue to separately operate their respective vehicle businesses.
Across the past few months, Rivian’s electrical architecture and software has undergone testing to validate if they are compatible with Volkswagen Group’s vehicles.
Oliver Blume, CEO of VW, 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.”
VW says it plans to make a US$5bn investment in Rivian, beginning with an initial US$1bn through an unsecured convertible note that will convert into Rivian’s common stock, subject to certain conditions upon the later of receipt of regulatory approvals.
RJ Scaringe, founder and CEO of Rivian, said, “We’re very excited to be partnering with Volkswagen Group. 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.”
The companies anticipate the completion of the JV formation in Q4 2024.