Volkswagen Group is putting some serious money into Rivian
26 Jun 2024|155 views
Rivian, the buzzy start-up best known for shaking up the electric truck space in America, is joining forces with one of the most dominant names across the entire auto industry: Volkswagen Group.
Specifically, the two names are entering a joint venture (JV) that is targeted at creating "next generation electric architecture and best-in-class software technology" - the combination of which will result in a new generation of software-defined vehicles (SDVs). Interesting to note is the emphasis by both companies that the JV will be equally controlled and owned, with its formation to be completed in the fourth quarter of 2024.
While most legacy carmakers out there today have gotten the hardware portion down pat, the next era of carmaking will arguably be fought on the software front. As brands put increasing weight on their individual in-car operating systems and driver assistance features, so too are consumer expectations rising in tandem - especially with regards to how intuitive the user experience remains.
Rivian and Volkswagen Group believe that the joint venture will help to accelerate software development for both companies moving forward, allowing for a mutual exchange of expertise, which, in turn, should help to lower the cost per vehicle.
The announcement of the fresh partnership between the two companies is big enough news in itself, but just as significant is the amount of money that Volkswagen Group is pledging to invest into Rivian: A whopping total of $6.78 billion (USD 5 billion), out of which $1.36 billion will be invested first.
Rivian and Volkswagen Group have also stated that they aim to launch vehicles incorporating this technology within the second half of this decade.
With how much money the German company is committing to the partnership, however, it should be expected that it envisions a certain degree of benefit for itself. And indeed - the two companies state that the JV will allow Volkswagen Group to tap into Rivian's existing electrical architecture and software platform in the short term.
Rivian has also revealed that it plans to license its existing intellectual property rights to the JV. The company states that "significant work" has been done over the past months to validate that its electrical architecture and software are compatible with vehicles within the Volkswagen Group.
In case there's any fear that the partnership will dilute the individual identity of each company, Volkswagen and Rivian have been quick to assure that they will each "continue to separately operate their respective vehicle businesses".
Speaking on the news, Oliver Blume, CEO of Volkswagen Group, said, "We are also acting in the best interest of our strong brands, which will inspire with their iconic products. The partnership fits seamlessly with our existing software strategy, our products, and partnerships."
Expressing his excitement about the partnership, RJ Scaringe, Founder and CEO of Rivian, also added, "Not only is this partnership expected to bring our software and associated zonal architecture to an even broader market through Volkswagen Group's global reach, but this partnership also is expected to help secure our capital needs for substantial growth."
Rivian, the buzzy start-up best known for shaking up the electric truck space in America, is joining forces with one of the most dominant names across the entire auto industry: Volkswagen Group.
Specifically, the two names are entering a joint venture (JV) that is targeted at creating "next generation electric architecture and best-in-class software technology" - the combination of which will result in a new generation of software-defined vehicles (SDVs). Interesting to note is the emphasis by both companies that the JV will be equally controlled and owned, with its formation to be completed in the fourth quarter of 2024.
While most legacy carmakers out there today have gotten the hardware portion down pat, the next era of carmaking will arguably be fought on the software front. As brands put increasing weight on their individual in-car operating systems and driver assistance features, so too are consumer expectations rising in tandem - especially with regards to how intuitive the user experience remains.
Rivian and Volkswagen Group believe that the joint venture will help to accelerate software development for both companies moving forward, allowing for a mutual exchange of expertise, which, in turn, should help to lower the cost per vehicle.
The announcement of the fresh partnership between the two companies is big enough news in itself, but just as significant is the amount of money that Volkswagen Group is pledging to invest into Rivian: A whopping total of $6.78 billion (USD 5 billion), out of which $1.36 billion will be invested first.
Rivian and Volkswagen Group have also stated that they aim to launch vehicles incorporating this technology within the second half of this decade.
With how much money the German company is committing to the partnership, however, it should be expected that it envisions a certain degree of benefit for itself. And indeed - the two companies state that the JV will allow Volkswagen Group to tap into Rivian's existing electrical architecture and software platform in the short term.
Rivian has also revealed that it plans to license its existing intellectual property rights to the JV. The company states that "significant work" has been done over the past months to validate that its electrical architecture and software are compatible with vehicles within the Volkswagen Group.
In case there's any fear that the partnership will dilute the individual identity of each company, Volkswagen and Rivian have been quick to assure that they will each "continue to separately operate their respective vehicle businesses".
Speaking on the news, Oliver Blume, CEO of Volkswagen Group, said, "We are also acting in the best interest of our strong brands, which will inspire with their iconic products. The partnership fits seamlessly with our existing software strategy, our products, and partnerships."
Expressing his excitement about the partnership, RJ Scaringe, Founder and CEO of Rivian, also added, "Not only is this partnership expected to bring our software and associated zonal architecture to an even broader market through Volkswagen Group's global reach, but this partnership also is expected to help secure our capital needs for substantial growth."
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