Volkswagen and Rivian sign $5 billion deal

Volkswagen and Rivian have entered into a $5 billion partnership to develop software-defined vehicles.

Here's What We Know

According to a press release, the joint venture will focus on Rivian's zone-based approach to electric vehicles, which significantly reduces the complexity of wiring and electronics. Through this partnership, Rivian and Volkswagen are expected to launch new vehicles using their combined capabilities, but each company will continue to produce its own models separately.

The amount of cooperation is broken down into components. Volkswagen will invest USD 1 billion in Rivian, followed by two more investments of the same amount in 2025 and 2026. The automotive brand also plans to invest a total of USD 2 billion in the joint venture, some at launch and some as a loan in 2026.

This work will allow Volkswagen to adopt Rivian's signature zonal architecture for its future cars.

Rivian has experienced some financial difficulties this year, leading the company to abandon plans for a plant in Georgia and to lay off 10 per cent of its workforce.

A deal of this magnitude with a leading conventional automaker should help the company stabilise as it works to achieve its next-generation electric vehicle goals.

Source: businesswire