Volkswagen has increased its stake in US partner Rivian. A second payment of one billion US dollars (approximately €850 million) became due on June 30, following Rivian’s achievement of the targets agreed upon in the contract. Meanwhile, the group also thinks about a new ‘Nova’ platform for its ICE/PHEV luxury and supercars.
VW had invested the first billion dollars directly upon signing the agreement last year and has since held an 8.6% stake in Rivian. The exact shareholding resulting from this additional billion-dollar investment has not yet been specified.
If Rivian continues to meet the agreed-upon milestones, two further instalments from Wolfsburg may follow, totaling up to $3.5 billion, currently around €3 billion. That would make Volkswagen Rivian’s largest single shareholder, replacing Amazon.
The partnership agreement between VW and Rivian, signed in 2024, has an overall value of $5.8 billion, of which $3.5 billion is to be allocated via VW’s stake in Rivian.
$2.3 billion is earmarked for the joint venture between Rivian and Volkswagen Technologies, which will develop technologies and software for electric cars together. That way, the German carmaker aims to gain access to Rivian’s software and electronics architecture, to resolve its own software problems in turn.
ID.1
Officially, the new electronics architecture will be used in both partners’ electric vehicles, although the German carmaker is seen as the primary beneficiary. The first Volkswagen model featuring Rivian technology is expected to be the ID.1, a small electric car set to launch in 2027.
The electronics architecture is anticipated to help achieve the targeted base price of around €20,000. According to reports, production is set to start in Portugal in September 2027.
Rivian met the prerequisite for the current payment when it achieved a gross profit in Q1 2025, following its achievement in Q4 2024. The partners had defined two consecutive gross profits as a milestone.
According to information from early May, Volkswagen will pay a 33% premium on the average Rivian share price between May 15 and June 27 for the billion-dollar payment. Due to this arrangement, it was not yet clear exactly how many Rivian shares VW would receive for the fixed agreed sum.
Rivian R3
While $2.3 billion is earmarked for the joint venture, Rivian can also utilize the proceeds from VW’s agreed-upon share purchases for other projects. These include the development of more affordable models below the current R1 line, the R2 has already been unveiled, and a compact R3 has been announced.
As Rivian has posted losses overall so far, the billion-dollar payments from Germany are expected to support the company’s financial stability. For 2025, Rivian anticipates an adjusted EBITDA loss of $1.7 to $1.9 billion.
The current tranche was only tied to the financial milestone of two consecutive gross profits. However, to receive the next billion-dollar payment in 2026, technological milestones must also be achieved. The final payment of an additional 500 million euros in 2027 is contingent upon the series production of the first Volkswagen model featuring Rivian technology, as said, the ID.1.
Nova platform
Meanwhile, sales of luxury and super sports EVs are somewhat disappointing. That’s why Volkswagen is considering developing a new platform for its ICE and PHEV cars, called ‘Nova’. Luxury brands like Bentley and Lamborghini, in the first place, should benefit from it.
Under the code name Nova, the VW Group wants to develop a new technological base for its bigger ICE limousines, its super sports cars, and its PHEVs. They will have to offer the same commodities as their EV counterparts and be less costly to produce and simpler to maintain. The price and weight also need to decrease.
For its future EVs, VW is developing a new architecture in collaboration with Rivian; for its ICE/PHEV vehicles, it is looking for another partner. Maybe this will be the (also American) software boutique Applied Intuition.
However, the deal has not been made yet. The Silicon Valley-based firm is seeking €4 billion for the development, employing around 1,200 engineers and technicians in the process.
That’s a little too much, even for the VW Group, so the group is also considering living with the current but updated architecture a while longer. Insiders warn that an extensive overhaul is necessary and that it’s uncertain whether this is enough to compete with a still-growing competition.
