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Volkswagen and Rivian have crossed all their T’s and dotted all their I’s in their new $5.8 billion joint venture, which officially kicks off its work on November 13th, the companies announced today.
Last June, VW said it would invest $5 billion in Rivian as part of a new joint venture that’s focused on developing a new electrical architecture and vehicle software for future models, including subcompact cars, with the first planned for 2027. The investment size has now increased to $5.8 billion.
“Rivian and VW Group Technology, LLC”
The new joint venture, dryly named “Rivian and VW Group Technology, LLC,” will be led by Rivian software chief Wassym Bensaid and VW Group chief technology engineer Carsten Helbing. Teams will be based in Palo Alto, California, initially, and three other sites are in development in North America and Europe. Developers and engineers from both companies will fill out the ranks of the new venture.
Image: Rivian
At the time, the new venture was seen as a big win for Rivian, which has lost over $1 billion each quarter for the past year and is still struggling to find its financial footing. The company recently said it expected to lose up to $2.88 billion in adjusted earnings for the year, up from the previous guidance of $2.7 billion in losses. And it has gone through several rounds of layoffs over the past two years.
Meanwhile, VW has been going through its own struggles around EVs. The company’s plug-in models are selling well, but its market share in North America is shrinking. Its financial struggles began to peak this year, forcing it to close at least three of its German factories and downsize its remaining plants. And its software has been plagued by bugs and customer complaints.
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