In a modern application of the ancient principle of “I scratch your back, you scratch mine,” Volkswagen is funding a joint venture with struggling EV automaker Rivian which will put billions of dollars in the latter’s war chest for further product rollouts, while VW will gain access to Rivian’s technology.
Per reporting by Reuters and other sources, Volkswagen will initially pump $1 billion into Rivian as the newly minted partners start their equally controlled joint venture, with $4 billion in additional investments to follow by 2026.
News of the robust cash infusion from Volkswagen caused the value of Rivian stock – which had been crumbling steadily throughout 2024 – to skyrocket by 50 percent within hours during Wednesday trading. Rivian will now have the funds necessary to start producing and marketing its more affordable R2 electric SUVs by 2026, Reuters was informed by the automaker’s chief executive, R.J. Scaringe.
While Rivian gets the cash it needs to expand beyond its initial two-vehicle lineup of the R1T pickup and R1S SUV – both high-priced premium models, and rivals to the GMC Hummer EV Pickup and GMC Hummer EV SUV – Volkswagen will get something significant out of the deal, too. Namely, the Wolfsburg car company will receive the software and technology it needs to develop its own “software-defined vehicles” or SDVs. This, Scaringe says, will help VW challenge Tesla.
Scaringe told investors that Rivian’s technology will help VW overcome “the enormous difficulty for incumbent existing auto manufacturers to develop their own full stack software.” According to him, VW spent billions in an effort to match Tesla’s vehicle software platform and achieved essentially nothing. His company’s tech, however, will let its partner reduce the number of electronic control units or ECUs to just seven rather than 50 to 70 per vehicle.
Oliver Blume, chief executive at VW, echoed Scaringe’s statements. He remarked that “through our cooperation, we will bring the best solutions to our vehicles faster and at lower cost.” While not referring directly to Tesla, he noted “we are strengthening our technology profile and our competitiveness.”
The single-stack software architecture developed by Rivian – and soon to be at Volkswagen’s disposal – greatly streamlines control of a vehicle’s systems, as well as enabling easier over-the-air updates, simpler fast charger use, and other critical electronic functions.
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Comments
LUCID seems to have the better EV tech tho.
But Rivian has the better product portfolio and better positioning for survival. Meanwhile that’s a problem for Lucid. Tesla, Rivian, and many legacy automakers already have somewhat affordable electric SUVs (emphasis on “somewhat”). But Lucid only has an expensive sedan (which as much as we may not like it, its not what sells these days) and only recently announced the release of an SUV, but an expensive SUV. While Rivians SUV and truck is gaining popularity and have 2 affordable options in the pipeline awaiting completion of their second plant with the potential to have close to the popularity of a Tesla Model Y. Lucid still made no announcement on an affordable model. I honestly don’t see Lucid sticking around much longer. They are simply not making smart business decisions to try to gain scale.
Fools and their money are soon parted.
I’ve no idea what the interior/drivability of the R1S is, but I will say I am seeing them pop up in my neighborhood fairly frequently. And it looks nice. Unlike all the tesla Y’s I see. The polestar is also something I would not be embarrassed to be seen in. So many of the EV’s just look dumb. And I know the Y/3 are complete strippers inside as well, both of which I would be embarrassed to even be seen in let alone own.
It has nothing to do with sharing platforms! It is for sharing software and only that!
Who gives a rats. And why is this article in a GM forum?
Because many people unlike you follow the EV market and believe it will grow significantly over time and actually like EV’s. Don’t like it don’t read it.