Yahoo Autos Volkswagen and Rivian Officially Launch Joint Venture Agreement
"Hearst Magazines and Yahoo may earn commission or revenue on some items through these links."
Volkswagen is increasing its investment in Rivian to $5.8 billion from $5 billion, as part of a joint venture agreement that launched on November 13.
The investment includes a 50 percent stake in the joint venture, which will develop new technology for electric vehicles.
The venture will initially focus on developing next-generation EV architecture and software technology but could shift to other EV tech such as battery modules.
UPDATE 11/13/24: Volkswagen and Rivian reiterated Tuesday that they're forming a joint-venture company focused on developing next-generation EV architectures and software technology. Volkswagen increased its investment in Rivian to $5.8 billion from the previously announced $5 billion as part of a 50 percent stake in the venture. Speaking to members of the media on a conference call announcing the partnership, Oliver Blume, the chief executive of Volkswagen explained that the partnership will initially focus on developing software but may shift down the line to include EV hardware such as battery modules. The new company will be known as Rivian and VW Group Technology, it will be headquartered in Palo Alto, California.
Volkswagen announced on Tuesday that it would invest up to $5 billion in the fledgling electric manufacturer Rivian as part of a new equally controlled and owned joint venture to develop a next-gen EV architecture. The partnership aims to strengthen areas of weakness in both companies, with Volkswagen looking for software expertise and Rivan in need of both manufacturing knowledge and an influx of cash.
Volkswagen said it would invest an initial $1 billion in Rivian, with an additional $4 billion expected to be funded through 2026. If regulators approve the transaction, it would mean Volkswagen, alongside Amazon, becomes a significant shareholder in Rivian.
The approval of the joint venture would also give VW immediate access to Rivian's current electronic architecture for use in its own vehicles. According to Rivian, significant work has been done over the past several months to confirm compatibility between Rivian's architecture and Volkswagen's vehicles.
Cash Influx
Despite earning high praise for its current lineup from industry reviewers (Car and Driver included), Rivian has struggled to ramp up production and turn a profit from its sales. As recently as March, Rivian paused construction on a roughly $5 billion factory in Georgia in a bid to save money. According to R.J. Scaringe, Rivian's founder and chief executive, the influx of cash from Volkswagen will help Rivian launch the upcoming R2 SUV with its targeted $45,000 starting price.
"This is important for us financially," Scaringe said of the Volkswagen partnership on a conference call with reporters on Tuesday.
In addition to funding, the partnership may also help Rivian with manufacturing expertise, something VW, as the second-largest automaker in the world, has in droves. Rivian announced in April that it expects to sell roughly 57,000 vehicles this year, which is roughly one-third the number of vehicles the Volkswagen group sold each week in 2023.
This story was originally published June 26, 2024.
You Might Also Like
