Volkswagen has entered into a partnership with US Tesla challenger Rivian.
The first vehicles based on the new electric architecture are expected to be launched as early as 2027, CEO Oliver Blume announced in Palo Alto, California.
Rivian’s electric pickup truck.Image: Rivian
Volkswagen is once again increasing investment in the project: the Wolfsburg-based company hopes to spend 5.8 billion euros on the collaboration, 800 million euros more than originally planned. Through the joint venture, Volkswagen will have access to U.S. electrical and software architecture.
The two companies announced their cooperation at the end of June and received approval from the Federal Cartel Office in July. The collaboration involves software, control computers and network architecture. The plan envisages a joint venture to be jointly developed and managed equally by both manufacturers. It will be based on Rivian's existing electronic architecture and will be further developed.
Volkswagen's new electric vehicles will gradually switch to Rivian's technology and software. Blume said the first models featuring the new technology will be launched in 2027. “We started with Volkswagen, then Audi, Scout, Porsche and then all the other brands.” This includes all vehicle categories, from small cars to luxury and sports cars. This will enable high-volume production and reduce costs. Rivian technology will only be used in electric vehicles.
Software issues delay model release
The Wolfsburg-based company has struggled with internal software development issues for years and suffered multiple delays. As a result, some model launches have been delayed, some by several years. Rivian, on the other hand, has developed its own architecture from the beginning, in which the car's electronics are divided into zones and have their own computers, so the number of control devices is significantly reduced. The second generation of the platform is now in use there.
The new joint venture is scheduled to begin operations this Wednesday. Its headquarters will be in Palo Alto, California, with additional offices planned in Europe and North America. RJ Scaringe, founder and owner of American Partners, said the majority of the team will come from Rivian, with some colleagues from Volkswagen. Dual leadership consists of a manager from Volkswagen and a manager from Rivian.
Europe's largest automaker plans to spend up to $5.8 billion on the project, with Rivian's stake accounting for $3.5 billion. In addition, $2.3 billion will flow into the new joint venture, including a $1 billion loan. There had been rumors that Rivian would invest $3 billion and the joint venture would invest $2 billion. Both amounts were increased again, Bloom confirmed.
$392 million lost on 10,000 deliveries
For Rivian, this is a welcome infusion of cash. The company, founded in 2009, still loses money and is struggling with declining interest in electric vehicles in the United States. “This partnership and this deal definitely provides us with the capital we need to further increase production,” Rivian boss Scaringer said.
Last quarter, Rivian delivered about 10,000 vehicles, had sales of $874 million, and lost $392 million. During the same period, the Volkswagen Group delivered nearly 2.2 million vehicles and generated sales of 78.5 billion euros. Although after-tax profits dropped significantly, it still achieved a surplus of 1.58 billion euros.
Rivian is active in two popular vehicle categories in the United States, making large SUVs and pickup trucks. Rivian also makes electric delivery vans for Amazon, which can now be seen in Europe. The world's largest online retailer is also an investor. (Sudanese Development Authority/Department of Political Affairs)
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