Volkswagen will invest $5 billion in Rivian and form new electric JV

Volkswagen Group has announced a $5 billion investment in electric car maker Rivian to create a joint venture (JV) for new electric architecture and software technology.

Rivian is known for its flagship – R1T and R1S electric vehicles and later for delivery vans. These vehicles have led the company to develop a new generation of EVs including the R2 and R3 series for 2026.

The two automotive companies engaged in conversation for the past few months to validate Rivian’s electrical architecture and software for Volkswagen vehicles. The new partnership will enable the Irvin California-based EV company to expand widely in the automotive field.

New products made by the two companies will reduce car prices with software and hardware innovations. These partners will spend their experiences and resources to find breakthroughs under the new JV.

Volkswagen Group CEO, Oliver Blume (left) and RJ Scaringe Founder and CEO of Rivian (right) – Source: Rivian

The JV includes Rivian’s zonal hardware design and technology platform as the foundation of future SDV products. Based on the current revelations, Rivian will share its electrical architecture and license existing intellectual property rights to this joint venture.

The Volkswagen Group will use Rivian’s electrical and software platform in its new vehicles and speed SDV plans. Aside from this approach, both firms will pursue their business as usual.

The German car company will pour $5 billion into Rivian. It will start with $1 billion 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. However, the $4 billion investment will flow under transaction2.

Meanwhile, the new JV formation will be completed by the fourth quarter of this year. All transactions between the two companies will be completed in definitive agreements. Furthermore, the conditions included in these agreements and the receipt will require regulatory approvals.

(source)