• Rivian and the Volkswagen Group’s joint venture kicks off on Wednesday, the automakers said. 
• It’s called “Rivian and VW Group Technology, LLC.”
• Through the $5.8 billion deal, Rivian gets much-needed capital and VW benefits from the startup’s expertise in software and electrical architectures. 

Rivian and the Volkswagen Group’s joint venture now has a name and a launch date. Rivian and VW Group Technology, LLC—or, Rivian and Volkswagen Group Technologies, for short—kicks off Wednesday. 

The EV startup and automotive juggernaut announced their intentions to make a deal in June. Now the tie-up is actually happening, and the companies have revealed some key details. One big one: Initially, Volkswagen said it would invest $5 billion into Rivian to leverage the startup’s expertise in vehicle software and electrical architectures. Now that’s up to $5.8 billion. 

The venture will be jointly run by Rivian’s Chief Software Officer, Wassym Bensaid, and Carsten Helbing, Volkswagen Group’s CTO. They’ll serve as co-CEOs. It’ll be based in Palo Alto, California, to start. Three more sites are in development North America and Europe, the companies said on Tuesday. 

Through the deal, Volkswagen’s brands will benefit from the underlying technology Rivian has developed—namely, vehicle software and electrical architectures. That’s something Volkswagen has struggled to build in-house for years. And it’s increasingly important, as automakers look to create “software-defined vehicles” that offer satisfying user interfaces, seamless over-the-air updates and paid subscription features. 

Rivian has proved adept at simplifying vehicle electronics in ways that have eluded legacy automakers. For its second-generation R1 vehicles, the startup reduced the total number of electronic control units (ECUs) from 17 to seven, eliminating miles of wiring and reducing costs. Most cars have 100 or more ECUs. 

Together, Rivian and VW will develop “next-generation electrical architecture and best-in-class software technology for both companies’ future electric vehicles, covering all relevant vehicle segments, including subcompact cars,” the companies said in a press release. Rivian’s upcoming R2 will use technology from the joint venture. Volkswagen didn’t specify any models, but since we know VW is working on an electric ID. Golf, that—and subsequent smaller cars—could make use of this technology. 

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They’ll collaborate on electronics and underlying vehicle software—the backbone of modern vehicles—but not other areas like batteries or motors. Volkswagen plans to put a vehicle with the new architecture into production by 2027. 

During a call with media on Tuesday, Volkswagen Group CEO Oliver Blume said the jointly developed technology will be used by the Volkswagen brand first. 

“We will start with Volkswagen, then Audi, Scout, Porsche, and afterwards, all the brands to come,” Blume told reporters. “The positive aspect is that we will be scalable from the very small segment up to luxury cars, sports cars. The electric electronic architecture will fit and will be scalable and will be usable for a great volume of cars.”

Cariad, Volkswagen’s in-house software division, he said, will continue to be important to the automaker’s software strategy. 

Rivian, meanwhile, will get the capital it needs to cross the so-called “valley of death” and launch its next-generation R2 SUV in 2026. The mainstream, $45,000 model is widely seen as the key to Rivian’s future, as it should be cheaper and made in higher volumes than the startup’s current lineup. By linking up with VW, Rivian will also benefit from that giant’s scale when it comes to ordering some components. 

“Today’s 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, in a statement. “We’re thrilled to see our technology being integrated in vehicles outside of Rivian, and we’re excited for the future.”

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