8:44 am, November 13, 2024
Volkswagen Group has invested $5.8bn (£4.55bn) in adventure-themed EV maker Rivian in a move that will see the companies form a joint venture to create new electric vehicle architectures.
The tie-up will see the two companies sharing electric car technology in the face of increased competition from Chinese rivals and a slower than anticipated global uptake of new EVs.
The move will give Rivian a crucial source of funding as it prepares to launch its R2 SUV next year, while VW will be able to use Rivian’s technology in its own cars. The first VW models using Rivian technology should be with customers by 2027.
Rivian also makes electric delivery vans, of which 100,000 have been sold to online shopping giant, Amazon.
‘By combining complementary expertise, the two companies plan to reduce development costs and scale new technologies more quickly,’ said a joint statement, issued by the two companies.
Details of the plan have yet to be fully announced but it’s understood that software engineers and developers from both firms will initially work side by side in California, while three other facilities in North America and Europe will be established.
The integration of Rivian’s software will appear in Volkswagen and Audi models, as well as VW’s forthcoming Scout brand, said VW CEO Oliver Blume. He also alluded to ‘sports cars’ but did not specify which brand – Bentley, Porsche and Lamborghini all fall under the VW umbrella.
‘We’re thrilled to see our technology being integrated in vehicles outside of Rivian, and we’re excited for the future,’ Rivian CEO RJ Scaringe added, in a statement.
The announcement comes at a critical time for VW, which is currently negotiating with its Works Council around potential job losses and pay cuts after posting its lowest third quarter earnings since the covid pandemic. Rivian, meanwhile, has yet to turn a profit.
Rivian shares leapt by more than 9% in after-hours trading following the announcement.
