Volkswagen and Rivian have expanded their partnership with the formation of a new joint venture (JV), named Rivian and VW Group Technology, to drive innovation in electric vehicle (EV) technology.
The new venture will focus on creating software and electronic systems that are critical for the future of electric and autonomous driving technologies.
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It will particularly focus on developing technologies for upcoming models, including subcompact cars expected to launch in 2027.
This move builds on the initial collaboration announced in June, when Volkswagen revealed plans to invest $5bn in Rivian.
Rivian founder and CEO RJ Scaringe said: “Today’s finalisation of our joint venture with Volkswagen Group marks an important step forward in helping transition the world to electric vehicles.
“We’re thrilled to see our technology being integrated in vehicles outside of Rivian, and we’re excited for the future. Rivian will continue to stay focused on creating best in class products and services that benefit our customers, helping to drive EV adoption.”
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By GlobalDataAs part of the new agreement, Volkswagen will increase its investment in Rivian to $5.8bn. This investment includes a 50% stake in the JV.
As part of the deal, Rivian will receive a significant financial boost, starting with an initial $1bn loan from VW, followed by $1.3bn in shares and an additional $3.5bn investment in the coming years.
The investment is seen as a crucial support for Rivian, which is preparing to launch its more affordable R2 SUV model amid rising borrowing costs and a slowdown in EV demand.
Scout Motors, a unit of Volkswagen, will also be among the first to adopt the new architecture for its vehicles.
The new joint venture will be co-led by Rivian’s software chief, Wassym Bensaid, and VW Group’s chief technology engineer, Carsten Helbing.
The teams will be based initially in Palo Alto, California, with additional sites planned in North America and Europe.
The JV will leverage Rivian’s existing technology to launch the R2 in the first half of 2026 and potentially introduce Volkswagen Group models as early as 2027.
Volkswagen Group CEO Oliver Blume said: “The partnership with Rivian is the next logical step in our software strategy. With its implementation, we will strengthen our global competitive and technological position. Today’s launch of the joint venture demonstrates the potential we want to leverage together in the coming years.
“We have a clear plan to offer our customers the best products and digital experiences at attractive prices through state-of-the-art development processes, innovative technological approaches, and a competitive cost base driven by synergies.”
