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VW is betting billions on Rivian: This is how the car giant wants to solve the software problems!
Volkswagen invests $1 billion in Rivian to solve software problems and plans comprehensive partnership for electric cars.
VW is betting billions on Rivian: This is how the car giant wants to solve the software problems!
The partnership between Volkswagen and Rivian is taking further shape. Volkswagen has decided to increase its stake in the US electric car maker Rivian in order to solve urgently needed software problems. A second round of investment of $1 billion, equivalent to about 850 million euros, is due on Monday. The farang reports that Volkswagen now owns a total of 8.6 percent of Rivian and plans to invest up to $5.8 billion in the project.
Last year, $1 billion flowed into the first shares. This means that VW is securing an important position at Rivian – also in view of the challenges in its own software development. Further payments are also planned that are linked to the achievement of certain technical milestones. The automotive giant has repeatedly struggled with difficulties in its own software development in recent years, which has led to delays in the market launch of new models.
Strong together in software development
The collaboration is aimed not only at increasing shares, but also at establishing a joint venture. This joint venture called Rivian Volkswagen Technologies, which is scheduled to launch in 2024, will develop technology and software for electric cars. VW is convinced that the partnership with Rivian can help save costs in software development, such as Tagesschau.de emphasized. This would have come at the right time given the repeated problems at the Volkswagen subsidiary Cariad.
“We rely on close cooperation with Rivian to make faster progress in software technology,” explained VW spokesman. Rivian's approach of dividing the car electronics into several zones with their own computers is considered innovative. This made it possible to reduce the number of control units required in the second generation of the Rivian platform from 17 to 7.
Future vehicle models in view
The first model that will benefit from this partnership is the ID.1 small electric car, which is planned for 2027. This will be produced in the Portuguese VW factory in Palmela and will probably aim for a price level of 20,000 euros. After the ID.1, a group-wide introduction of Rivian technologies is on the agenda, starting with Audi and later also Porsche.
Rivian says it is currently in an exciting phase. Despite a recent net loss of $541 million last quarter, an improvement from the $1.445 billion loss previously, the company is optimistic about the future. The company's share price recently rose by 42 percent - a sign from the market that this cooperation is well received.
Overall, it shows that VW and Rivian are entering into a promising strategic combination that not only covers the company's own software needs, but could also set new standards in the development of electric cars. Volkswagen Group emphasizes that the investments are also necessary to advance the implementation of the next projects and to ensure competitiveness in the electric car industry.