Berlin, June 26, 2024, The Europe Today: Volkswagen AG, the world’s second-largest automaker, announced on Tuesday its plans to enter a 50-50 joint venture with U.S.-based electric vehicle (EV) manufacturer Rivian. This strategic partnership aims to jointly develop next-generation software for use in both companies’ vehicles.
Germany-based Volkswagen stated it will invest $5 billion (€4.7 billion) in this collaboration. The innovative software resulting from this venture will be implemented in vehicles from both Volkswagen and Rivian, with the first products expected to hit the market before 2030.
“The partnership will accelerate the software development of the Volkswagen Group and Rivian,” Volkswagen’s statement read. “With our work together, we will more quickly achieve the best solutions for our vehicles at a lower cost,” added VW CEO Oliver Blume.
Volkswagen has faced significant challenges with its own software development subsidiary, CARIAD, which has caused delays of up to two years in the introduction of new EVs for its subsidiaries Audi and Porsche, as reported by the German business daily Handelsblatt.
The announcement of the deal has had an immediate impact on Rivian’s market performance, boosting its stocks by 42% in after-hours trading.
Founded in 2009, Rivian is currently valued at around $11 billion on the Nasdaq technology exchange. Despite its valuation, the company has been incurring substantial losses with its electric pickups and SUVs. In the first quarter of 2024, Rivian reported a loss of $38,000 per vehicle.
This partnership marks a significant step forward for both Volkswagen and Rivian in their quest to advance EV technology and improve their competitive positions in the rapidly evolving automotive market.
