Volkswagen AG will support its American partner Rivian Automotive with USD 800 millionsignaling its commitment to cooperation with the American partner despite weakening demand for electric vehicles and threats to reduce support policies from the new Trump administration.
The companies also named the leaders of their multibillion-dollar joint venture and unveiled an EV prototype. The joint venture, known as Rivian and VW Group Technology LLC, will be led by co-CEOs Wassym BensaidRivian’s chief software officer, and Carsten Helbing, VW’s chief technology officer, the companies said. The co-CEOs will lead a dedicated group of approximately 1,000 engineers from both companies.
New vehicles in 2027
In June, the two companies agreed to jointly develop battery-powered vehicles, and VW expects to invest up to $5 billion in Rivian.
Volkswagen intends to launch vehicles in 2027 with technology developed by the joint venture. The companies also intend to develop an entirely new software-defined vehicle with more advanced technologies, which they eventually intend to license to other automakers.
VW’s series of problems
The venture with Rivian could prove critical for Volkswagen as the long-time manufacturer has been struggling. In the aftermath the 2015 diesel scandal, Europe’s largest carmaker has unveiled perhaps its most ambitious electric vehicle initiative in the industry. But faulty software delayed key electric models, contributing to the 2022 ouster of then-CEO Herbert Diess.
Faced with weakening demand for electric vehicles in Europe and fiercer competition in China, where buyers are shifting to local models, VW is now considering big cost cuts in Germany, including the closure of several plants.
Mutual benefits
The prototype was shown to a group of reporters in Palo Alto integrates Rivian’s software-based vehicle architecture with an unmarked VW test vehiclewhich Bensaid said was equipped by JV engineers over a 12-week period.
Helbing, who will also serve as the venture’s chief operating officer, said the technology would be easy to use in commercially available Volkswagen models. He added that accelerated decision-making and development timelines are an added benefit of working with a smaller and more agile partner like Rivian.
By contrast, Bensaid said Rivian sees the venture as a way to increase cost savings by leveraging economies of scalewhich is used by its larger partner, and thus improving its own margins on vehicles.
