Volkswagen to invest £3.9bn in US-based Rivian

Volkwagen Group will invest up to £3.94 billion in US-based electric vehicle (EV) maker Rivian.

The two companies intend to form an equally controlled and owned joint venture to create electrical architecture and software technology for the next generation of EVs.

The partnership is anticipated to accelerate the development of software for Rivian and Volkswagen Group. It is expected to allow both companies to combine their complementary strengths and lower cost per vehicle by increasing scale and speeding up innovation globally.

Both companies aim to launch vehicles benefiting from the technology created within the joint venture in the second half of the decade. In the short term, the joint venture is expected to enable Volkswagen Group to utilise Rivian’s existing electrical architecture and software platform. 

Oliver Blume, CEO of Volkswagen Group, said: “Our customers benefit from the targeted partnership with Rivian to create a leading technology architecture. Through our cooperation, we will bring the best solutions to our vehicles faster and at lower cost. We are also acting in the best interest of our strong brands, which will inspire with their iconic products. The partnership fits seamlessly with our existing software strategy, our products, and partnerships. We are strengthening our technology profile and our competitiveness."

Volkswagen Group plans to make a £3.94 billion investment into Rivian. Initially Volkswagen Group will invest £790m in Rivian through an unsecured convertible note that will convert into Rivian’s common stock subject to certain conditions upon the later of receipt of regulatory approvals and December 1, 2024. Volkswagen Group is expected to invest a further £3.16bn as part of the transaction.

RJ Scaringe, founder and CEO of Rivian, said:“We’re very excited to be partnering with Volkswagen Group. Since the earliest days of Rivian, we have been focused on developing highly differentiated technology, and it’s exciting that one of the world’s largest and most respected automotive companies has recognized this.

"Not only is this partnership expected to bring our software and associated zonal architecture to an even broader market through Volkswagen Group’s global reach, but this partnership also is expected to help secure our capital needs for substantial growth. Rivian was created to help the world to transition away from fossil fuels through compelling products and services, and this partnership is beautifully aligned with that mission.”