Rivian and Volkswagen Group have finalized a multi-billion-dollar joint venture to develop software, paving the way to let the German auto giant leverage the EV startup’s more technical chops in the coming years. Volkswagen will invest up to $5.8 billion by 2027, about 16% more than when the deal was first announced in June.
Volkswagen Group has already made an initial investment of $1 billion in the form of a convertible note.
The new joint venture — Rivian and Volkswagen Group Technologies — will officially kick off November 13 as an independent company. And, if successful, it could be a boon for both companies. Rivian gets a needed injection of capital and the opportunity to diversify its business, while VW Group gains a next-generation electrical architecture and software for EVs that will help it better compete. Both companies argue the joint venture will reduce development costs and help scale new technologies more quickly.
The companies designed the joint venture as a 50-50 partnership with co-CEOs, who will report into both Rivian and Volkswagen Group. Rivian’s head of software Wassym Bensaid and Carsten Helbing, who is chief technical engineer at Volkswagen Group, will lead the joint venture. Developers and software engineers from both companies will join the joint venture, according to Rivian and VW. The team will be based initially in Palo Alto, California. Three other sites are in development in North America and Europe, the companies said Tuesday.VW, and more specifically its software arm Cariad, has struggled in recent years to deliver what some in the industry have dubbed a “software-defined vehicle.” This jargon industry term, sometimes abbreviated SDV, means any car, truck or SUV with capabilities that can be upgraded over time (or even new f …