Rivian and the Volkswagen Group will form an equally controlled, equally owned, joint venture (JV) to develop new electrical architecture and vehicle software technologies. Underpinned by the vision of this new partnership, Volkswagen likewise announced a $5 billion investment (€4.6 billion / £3.9 billion) into Rivian. The parties currently expect the completion of the JV formation in the fourth quarter of 2024.

Together, the OEMs are looking to accelerate the development of their vehicle software, aiming to combine their complementary strengths and lowering cost per vehicle by increasing scale and accelerating innovation globally. In recent months, both OEMs have worked to validate the compatibility of Rivian’s electrical architecture and software with the Volkswagen Group’s vehicles. Here, Rivian expects that that its zonal hardware design and integrated technology platform will serve as the foundation for future SDV development in the JV that will be applied to vehicles produced by both OEMs. Rivian also plans to contribute its electrical architecture expertise and is expected to license its existing IP rights to the joint venture. Vehicles equipped with the technology developed through the new JV are set to roll out in the second half of the decade.

In the short term, the JV will enable the Volkswagen Group to utilize Rivian’s existing electrical architecture and software platform – while accelerating the Group’s SDV plans and transition to a pure zonal architecture in the longer term. While a key ambition of the partnership is to accelerate Volkswagen Group’s SDV plans and transition to a pure zonal architecture, each company will continue to operate their respective vehicle businesses, separately.

In carrying out its $5 billion investment into Rivian, the Volkswagen Group will initially invest $1 billion (€935.1 million / £789.5 million) through an unsecured convertible note that will convert into Rivian’s common stock (subject to certain conditions upon the later of receipt of regulatory approvals and December 1, 2024). Volkswagen Group then expects to invest a further $4 billion (€3.7 billion / £3.1 billion) as part of the transaction. These transactions are subject to the completion of definitive agreements, the conditions included in those agreements and the receipt of required regulatory approvals.