- VW is taking a large stake in Rivian, now worth $5.8 billion
- Rivian's joint venture with VW has been officially established
- The Rivian R2 in 2026 and the Volkswagen in 2027 will be the first cars to feature a new hybrid electric structure.
The Volkswagen Group on Tuesday announced that it will increased its investment at Rivian as the two companies officially launch their previously announced joint venture Rivian with VW Group Technology.
The joint venture was announced in June with an initial investment of $5 billion from the VW Group over a period of years to access Rivian's electrical engineering know-how and software development.
On Tuesday, VW Group and Rivian announced that the investment will be increased to $5.8 billion. This is the result of VW pulling forward some future payments and changing the structure of the initial agreements, the companies said.
Rivian CEO RJ Scaringe (left) and Volkswagen Group CEO Oliver Blume
Under the revised terms of the agreement, $1.3 billion will be spent on software development, another $3.5 billion will be used by the VW Group to buy Rivian shares, and another $1 billion will be earmarked for loans to VW. Rivian.
A joint venture, which is expected to start working on Nov. 13will focus on developing and providing electrical architecture and software systems for both companies, with features such as network hardware and software stacks that enable vehicles to be updated over the air to live their full life as discussed during the investor briefing.
At the same forum, the two companies confirmed that the first vehicle to use these jointly developed systems will be the Rivian R2 crossover. expected in 2026. More investment from VW could be the difference in getting that lower-priced model across the line, as well as funding the continued development of hatchbacks like the R3 and other additional models that Rivian is teasing.
Rivian and Volkswagen Group electronic architecture and software stack
VW Group said some Volkswagen models may be the first of its vehicles to use the new systems. in 2027followed by cars from Audi and the new Scout model. VW Group CEO Oliver Blume said other sports cars could also use the systems, without giving further details.
The joint venture will initially be based in Silicon Valley and employ about 1,000 engineers. Three additional sites in the US and Europe are planned for the near future.
Both companies noted that they are open to further collaboration in other areas such as batteries, complete vehicle platforms, and joint manufacturing, but said that would be outside the scope of the current joint venture. It looks like Rivian will not join the development of VW Group's Scalable Systems Platform (SSP) for the next generation of EVs, according to a report published in July, which is being delayed due to software problems.