Rivian Automotive and Volkswagen Group entered into a transaction agreement to create their new joint venture (JV) – Rivian and VW Group Technology, LLC, known as Rivian and Volkswagen Group Technologies – with a total deal size of up to $5.8 billion. Through this JV, the companies plan to bring electrical architecture and software technology for future electric vehicles, covering all relevant vehicle segments, including subcompact cars.

The joint venture will be headed by Wassym Bensaid (Rivian) and Carsten Helbing (Volkswagen Group). Developers and software engineers from both companies will join the joint venture, the companies said. Teams will be based in Palo Alto, California initially, and three other sites are in development in North America and Europe. By combining their expertise, the two companies said they plan to reduce development costs and scale new technologies more quickly.

“The partnership with Rivian is the next logical step in our software strategy. With its implementation, we will strengthen our global competitive and technological position,” said Oliver Blume, CEO of Volkswagen Group. “The launch of the joint venture demonstrates the potential we want to leverage together in the coming years.”

“The finalization of our joint venture with Volkswagen Group marks an important step forward in helping transition the world to electric vehicles,” said RJ Scaringe, founder and CEO of Rivian. “We’re thrilled to see our technology being integrated into vehicles outside of Rivian, and we’re excited for the future.” Rivian will continue to stay focused on creating best-in-class products and services that benefit our customers, helping to drive EV adoption.”

The JV will aim to use the existing Rivian 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, the companies said.

The companies said the JV will evolve this modular and flexible state-of-the-art electrical architecture and it will scale the technology across a wide range of price points and international markets, paving the way for new generations of high-volume vehicles that are fully capable of advanced automated driving functions and can integrate over-the-air updates (OTA) and upgrades.

Teams from Rivian and Volkswagen Group said they have already successfully demonstrated the potential of the collaboration. In just twelve weeks, the team said it developed an initial drivable demonstrator vehicle. A Volkswagen Group vehicle has been retrofitted to run on Rivian’s in-market zonal hardware design and integrated technology platform.

Volkswagen Group said it plans to invest up to $5.8 billion in Rivian and the joint venture by 2027. An initial investment of $1 billion in the form of a convertible note has already been made. At the closing of the Joint Venture, Volkswagen Group said it will invest about $1.3 billion as consideration for background IP licenses and a 50% equity stake in the joint venture. These investments also balance part of lower future costs identified during the technical feasibility tests and the sharing of costs for the inclusion of selected Volkswagen MEB models, the Group said. The remaining investment of up to $3.5 billion is expected to come in the form of equity, convertible notes, and debt at future dates and based on clearly defined milestones, Volkswagen said. Further investments are tied to clear operational, technical, and financial milestones. The joint venture will operate as an independent company.