Volkswagen relaunches in the US: 5.8 billion for jv with Rivian

Wassym Bensaid, chief software officer of Rivian, and Carsten Helbing, chief technical engineer of the Vw group, will lead the joint venture. The developers and engineers will initially be based in Palo Alto, California, with three other sites currently under development.

"Volkswagen's strategy of further investing in the joint venture with Rivian," comments Dario Duse, Head of EMEA Automotive&Industrial division and Country Leader Italy of AlixPartners - could be aimed both at increasing market share in North America, having, among other things, an already advanced local base on software defined vehicles (Sdv) that would make it possible to get around the probable obstacle of further barriers that the new American government has loudly promised (duties, ed.), and to accelerate the path of recovery that VW itself, like other Western manufacturers, must also do 'at home'. From this point of view, it does not seem coincidental that the JV with Rivian has the chief software officer of Rivian and the chief technical engineer of the VW group as its leading figures'.

"After having declined the opportunity of joining forces with Renault for low-segment vehicles," Duse continues in his commentary for Il Sole 24 Ore, "Vw seems to be aiming at targeted 'native' partnerships in North America and China with Xpeng, with possible positive spin-offs of skills and approach on the group's headquarters as well. These are forms of M&A that are based on the development and sharing of platforms, which offer tangible advantages without necessarily going through larger and more critical merger or acquisition operations to be carried out'.

The automotive industry 'has entered a very complex period between stagnant demand (we are talking about Europe, which in October, with the EFTA area and the United Kingdom, recorded a -3% drop in sales of electric cars compared to the USA and Canada +9% and China +38% according to Rho Motion, ed, who in the absence of legacy of their own, as in the case of established manufacturers, have embraced software defined vehicles, halving product development time, 20 months as opposed to the average 40, and using software to modify functionalities that go well beyond the mere infotainment update in vehicles that have already left the factory,' adds Duse, who emphasises: 'Those who are furthest ahead on Sdv are the new players, including Rivian, Xpeng and another Chinese company, Nio'.

The joint venture with Rivian could also help Vw solve the problems of its software division, Cariad, which has been plagued by delays and billions in losses since its inception. It is a creature of Blume's predecessor Herbert Diess, but the dream of Cariad turning Vw into a tech company on the Tesla model never came true, quite the contrary. Recently, rumours have circulated that Cariad will become part of the new company and will in fact be driven towards liquidation, entrusting the jv with Rivian with the task of driving the group towards software-defined vehicles. There is also talk of an early farewell of Sanjay Lal, Silicon Valley guru, former Google, but also former Tesla and former Cisco. Called a year ago, without much luck, by the ceo of Cariad, Peter Bosch.

A push on development time and Sdv is indeed crucial for Volkswagen. The Wolfsburg giant is discussing an unprecedented cost-cutting plan with the trade union. There had even been talk of closing three out of 10 production sites in Germany, but then the hypothesis of a 10% reduction in salaries came up, the only way to save jobs and remain competitive, after a double profit warning.