Volkswagen and Rivian officially launch joint venture in €5.8 billion EV push

Volkswagen and Rivian have officially launched their joint venture, “Rivian and VW Group Technology, LLC,” which aims to accelerate the development of battery-powered vehicles and boost software architectures. The collaboration, valued at €5.8 billion, marks a significant increase from the €5 billion investment initially announced in June. The venture begins operations today.

Speaking at the launch event in Palo Alto, California, Volkswagen Group CEO Oliver Blume emphasized the partnership’s potential to transform both companies’ EV trajectories. “This collaboration brings together Rivian’s innovative software capabilities and Volkswagen’s global scale, enabling us to deliver cutting-edge solutions at reduced costs,” Blume stated.

Financial cushion for Rivian

The partnership will focus on developing next-generation EV platforms and software-defined vehicle architectures. These technologies aim to simplify production, enhance vehicle automation, and widen support for over-the-air updates, key features in modern electric cars.

Of the total investment, €3.5 billion will secure a direct stake in Rivian, while €2.3 billion will fund the joint venture itself. An additional €1 billion has been allocated as a convertible loan to Rivian, providing the company with a much-needed financial cushion.

The latter raises eyebrows, as Volkswagen itself is in dire need of cutting costs to make operations more profitable in the current automotive crisis—though the German giant doesn’t cope with losses.

Rivian CEO RJ Scaringe highlighted the strategic alignment of the two companies, stating, “This marks an important step in transitioning the world to electric vehicles. We’re thrilled to see Rivian’s technology integrated into vehicles beyond our own lineup.”

From concept to reality

The joint venture has already demonstrated its potential. It reportedly built a prototype vehicle using Rivian’s software in just twelve weeks. Based on a Volkswagen test model, this vehicle showcases the speed and efficiency the collaboration aims to achieve.

New EV models profiting from the partnership are expected to hit the market by 2027, starting with Rivian’s affordable R2 model in 2026. These vehicles will cater to various segments, from subcompact cars to luxury SUVs, including models from Volkswagen brands such as Audi, Porsche, and Scout Motors.

Challenges and opportunities

Initially based in Palo Alto, the joint venture plans to expand to additional North American and European sites. Teams will comprise engineers and developers from both companies, led by Rivian’s software chief Wassym Bensaid and VW Group’s Carsten Helbing. The tie-up with Volkswagen also means Rivian could more easily enter Europe with its own lineup.

For Rivian, the confirmed collaboration is good news. The EV startup has struggled financially since its IPO in 2021, posting significant quarterly losses and pausing projects like its Georgia factory.

For Volkswagen, the joint venture provides a pathway to overcome software development delays that have plagued its EV rollout. As mentioned, Scout Motors, Volkswagen’s US-only adventure vehicle brand and a direct competitor to Rivian, will also benefit from the joint venture and integrate technologies from the latter. Scout CEO Scott Keogh said, “Great vehicles require great software.”