German auto giant Volkswagen and U.S. electric vehicle manufacturer Rivian have launched a joint venture, committing to a $5.8 billion investment, $5 billion more than initially planned. This collaboration aims to develop advanced software and electronics architectures while scaling the electric vehicle platforms and architectures.
According to a joint press release of the two companies, the deal is expected to commence on Nov. 13. With this venture, the two companies plan to bring "best-in-class software technology" and "next-generation electrical architecture" for future electric vehicles of the companies. The deal will cover various kinds of vehicles, which would also include subcompact cars.
The new joint venture is called "Rivian and VW Group Technology, LLC" and will be headed by Rivian's Wassym Bensaid and Volkswagen's Carsten Helbing. To further strengthen the joint venture, software engineers and developers from both companies will be joining the newly-formed entity.
By combining their complementary expertise, the two companies plan to reduce development costs and scale new technologies more quickly. The goal is to be able to offer customers the best technological solution as early as possible.
According to the announcement, teams of the joint venture will be based in Palo Alto, California, initially, and three other sites are in development in North America and Europe.
Oliver Blume, CEO of Volkswagen Group, called the partnership with Rivian "the next logical step" in the software strategy.
"With its implementation, we will strengthen our global competitive and technological position. Today's launch of the joint venture demonstrates the potential we want to leverage together in the coming years," Blume said in a statement.
He also noted that they have a clear plan to offer their customers the best products and digital experiences, underscoring that these will have reasonable prices made through "state-of-the-art development processes."
On his part, RJ Scaringe, Founder and CEO of Rivian, said that the joint venture "marks an important step forward in helping transition the world to electric vehicles."
He said that Rivian will continue to "stay focused on creating best in class products and services that benefit our customers, helping to drive EV adoption."
The joint venture plans to utilize Rivian's existing electrical architecture and software technology stack, enabling the launch of Rivian's R2 in the first half of 2026 and support the expected launch of the first models from the Volkswagen Group as early as 2027.
According to CNBC, Rivian shares saw a surge of more than 6% during after-hours trading following the announcement.
