Here’s Why VW Is Now Teaming Up with Rivian

• Rivian and the Volkswagen Group have formed a joint venture and are seeking to share software and platforms in the coming years, with the German automaker set to invest $5.8 billion in Rivian by 2027.

• The two automakers have faced significant headwinds in the industry even amid successes and plans for wider EV lineups, with VW now working to avoid plant closures in Europe as Rivian works on boosting its finances ahead of the launch of new models.

• VW is currently working to set up the freshly relaunched off-road EV marque Scout stateside.

At first blush, Volkswagen has no shortage of EV models and technology spanning several key markets, with the US currently seeing just a small fraction of its global offerings in multiple segments. The impending debut of the long-awaited VW ID. Buzz, which will join the ID.4 stateside, still represents a relatively small part of VW's entire battery-electric lineup, which is far more varied in Europe and China, as well as an entry into a fairly limited segment that hasn't really been addressed to date.

But a new joint venture with Rivian, which formally kicked off this week, will see VW use Rivian platforms and software stack in a range of VW Group vehicles.

The two automakers have recently formalized their $5.8 billion joint venture, plans for which were first announced this June.

The joint venture comes at a precarious time for both automakers, with VW having seen significant challenges over the past couple of years with the expansion of its EV lineup amid high energy and manufacturing costs in Europe, which now threaten the continued operation of its plants for the first time in decades, as well as significant delays at its Cariad software division.

As such, VW hopes to benefit from Rivian's software, which has already been demonstrated in a VW prototype built over the course of 12 weeks.

The German automaker's EV market share on its home continent, meanwhile, continues to be dented by Tesla as well as a batch of new imports from China that are now the subject of intense political negotiations in the EU.

"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," said Oliver Blume, CEO of Volkswagen Group.

Rivian, for its part, has witnessed a slowdown in the EV market in the US amid continued losses and rising materials costs despite benefitting from a mostly smooth rollout of its first two models.

Earlier this year Rivian also revealed its more affordable R2 and R3 models in concept form, slated to be launched later in the decade, but which will still require significant expenditures to bring to production.

An injection of funds, therefore, and the future sharing of R&D costs is very timely for Rivian as it works to bring compact offerings to buyers starting in 2026.

"We're thrilled to see our technology being integrated in vehicles outside of Rivian, and we're excited for the future," said RJ Scaringe, founder and CEO of Rivian. "Rivian will continue to stay focused on creating best-in-class products and services that benefit our customers, helping to drive EV adoption."

Wassym Bensaid of Rivian and Carsten Helbing of VW will lead the joint venture.

What segment should VW address next in the US after the arrival of the ID. Buzz and the ID. 7 sedan? Let us know what you think in the comments below.