Volkswagen, alliance with Rivian on electric cars. US company skyrockets on the stock exchange

Unity is strength. A popular proverb that best sums up the change taking place within the Volkswagen group, which is increasingly interested in seeking partnerships to solve or speed up the achievement of new industrial objectives. After the alliances with the Chinese companies X-Peng, Saic and Horizon robotics, the group led by Oliver Blume has signed an investment agreement with the American start-up Rivian Automotive specialising in the production of electric vehicles. Specifically, the German manufacturer will invest a maximum of USD 5 billion (EUR 4.67 billion at current exchange rates) until 2026 in the Californian company and a 50:50 joint venture for the development of electric car platforms.

Volkswagen will commit USD 1 billion this year to purchase a bond that can be converted into Rivian shares once all regulatory approvals have been obtained. Another billion will be invested in setting up the joint venture. Between 2025 and 2026, Wolfsburg will buy Rivian shares for two billion and grant a one billion loan to the joint venture, but only on condition that specific milestones are reached.

If for Rivian it is a fundamental agreement for its own survival - to date it loses almost $40,000 for each vehicle delivered, sales are below expectations, in February it announced the dismissal of 10% of its employees, and after yesterday's announcement its shares rose by almost 50% - for Volkswagen, too, the importance of the joint venture is decidedly high. The reason is related to Rivian's contribution in hardware and integrated software platform, which will form the basis for the future development of software-defined vehicles within the new company. In fact, the current software platform of the American brand is characterised by a 'zone' configuration of in-vehicle microprocessors that significantly reduces the need for semiconductor chips.

It was precisely software development that was one of the biggest difficulties for the German group. Cariad, a company strongly desired by former CEO Herbert Diess to create a software platform in-house and transform Volkswagen into a tech company, failed to meet its targets and in 2023 alone created losses of EUR 2.5 billion and caused a delay of at least two years in the development of key models such as the electric Porsche Macan.

Rivian will license its existing intellectual property to the joint venture and the R2 SUV will be the first vehicle to use the new software. VW Group vehicles will follow, including the Audi, Porsche, Lamborghini and Bentley brands, thus integrating Rivian's architecture with the future German SSP platform expected in 2028.Another aspect not to be forgotten is related to the world of electric pick-up trucks sold in the United States, where Rivian sells the R1T while Volkswagen has no models capable of challenging the increasingly iconic Tesla Cybertruck, especially after the end of its collaboration with Ford.