Justin Sullivan/Getty Images
A Rivian electric pickup truck sits in the parking lot of a Rivian service center in South San Francisco, California, on May 9, 2022.
CNN
—
Rivian and Volkswagen Group are forming a joint venture to develop software for vehicles, the companies announced Tuesday.
As part of the deal, VW will invest a total of $5 billion in struggling electric car maker Rivian, including an immediate investment of $1 billion.
The companies did not disclose the name of the new joint venture or the names of its executives. Rivian Chief Executive Officer RJ Scaringe said on a conference call that there would be two partners, each reporting to one of the automakers.
“The joint venture is structured as a 50/50 joint venture with two co-CEOs reporting into both businesses, essentially,” Scaringe said.
Scaringe said VW's investment will provide funds to help expand manufacturing at Rivian, which is looking to build a new factory in Georgia.
“This is financially important to us,” he said. “And one of the elements here is that it's also implicit that Rivian's success is also important to the success of the Volkswagen Group.”
The two companies said they plan to launch new vehicles using the joint venture's technology by 2030.
Rivian's basic vehicle software designs are expected to form the basis of the new company's software. The technology it will design will include both the user interface software that runs things like entertainment systems and gauges, and more advanced vehicle software that interacts with the vehicle's motors and other systems. Rivian will also provide the electrical hardware designs on which these systems run, according to the joint announcement.
VW already has an auto software subsidiary, Cariad, which will continue to operate, VW Chief Executive Oliver Bloom said on a conference call. The new joint venture's operations will be in addition to Cariad's, not a replacement, he said.
Scaringe said on the call that the two companies may collaborate on cars in the future, but that's not currently envisioned, and that for now the companies will only work together on software and computer systems for cars.
The idea for the joint venture first emerged when Scaringe and Bloom were talking at Porsche's Experience Center in Atlanta, where Porsche owners and enthusiasts can drive Porsche cars and SUVs on a test track.
“So it was a lot of fun just talking about how we had the same vision (of cars),” Scaringe said, “but it quickly developed into serious discussions about how we could work together.”
In addition to being CEO of the entire Volkswagen Group, Blum is also CEO of Porsche, and Scaringe said he is a longtime Porsche enthusiast himself, having restored classic Porsche sports cars during his time at Volkswagen.
