Volkswagen has announced an additional investment of $800 million in its joint venture with Rivian (RIVN, Financial) to develop battery-powered vehicles. Earlier in the year, Volkswagen expressed plans to invest $5 billion in Rivian. Despite global challenges in electric vehicle demand and potential policy changes, both companies are committed to this venture. They have appointed new leadership and unveiled an electric vehicle prototype, showcasing their dedication to advancing this collaboration.
This investment provides Rivian with crucial financial support, potentially alleviating concerns about the company's spending. Moreover, it grants Volkswagen access to Rivian’s advanced software technologies, a domain where Volkswagen has previously struggled.
After the announcement, Rivian’s stock rose by 8.32% to $11.46 in post-market trading, following a regular session decline of 4.17%. The joint venture between Rivian and Volkswagen will be led by Rivian's Chief Software Officer Wassym Bensaid and Volkswagen’s Chief Technology Officer Carsten Helbing. Together, they will oversee a team of around 1,000 engineers from both companies.
According to Bensaid, this partnership accelerates future plans, with Volkswagen aiming to launch vehicles with refined technologies developed by the joint venture by 2027. The companies are also working on a new software-defined vehicle model, which will eventually be available for other automakers to license.
During a demonstration in Palo Alto, a prototype integrated Rivian's software-based vehicle architecture into an unmarked Volkswagen test car. The engineering team completed this installation in just 12 weeks. Helbing noted that this technology could quickly be adapted to Volkswagen’s commercial models, emphasizing the benefit of collaborating with a more agile partner like Rivian.
Bensaid highlighted the venture as an opportunity for Rivian to leverage the economies of scale provided by Volkswagen, potentially improving its profitability. Volkswagen's new Scout brand also plans to utilize the technology from the Rivian-VW partnership.
