ATLANTA — Electric vehicle manufacturer Rivian Automotive and the Volkswagen Group are partnering up in a nearly $6 billion deal to create a new technology company.
According to a Tuesday announcement, Rivian and Volkswagen have entered into a joint venture and will create the Rivian and Volkswagen Group Technologies company, aimed at bringing next-generation electrical architecture and best-in-class software technology for both of the companies’ future electric vehicles.
The transaction agreement between the two automotive manufacturers was sized at up to $5.8 billion and is expected to cover all relevant vehicle segments, including subcompact cars.
“Today’s launch of the joint venture demonstrates the potential we want to leverage together in the coming years. We have a clear plan to offer our customers the best products and digital experiences at attractive prices through state-of-the-art development processes, innovative technological approaches, and a competitive cost base driven by synergies,” Oliver Blume, CEO of Volkswagen Group said, adding that their partnership with Rivian would be the next logical step in the company’s software strategy and strengthened their position in the global market.
[DOWNLOAD: Free WSB-TV News app for alerts as news breaks]
TRENDING STORIES:
- Couple says Invitation Homes has not removed eviction notice, leaving them homeless
- FBI searching for man who failed to show up for court in Atlanta
- Drivers will start receiving citations if caught speeding in Decatur school zone
The announcement on the joint venture said the partnership will use Rivian’s current electrical architecture and software technology stack. Doing so allows the company to launch the Rivian R2 in the first half of 2026 while also supporting the launch of the first models from the Volkswagen group in 2027.
“Today’s finalization of our joint venture with Volkswagen Group marks an important step forward in helping transition the world to electric vehicles. We’re thrilled to see our technology being integrated in vehicles outside of Rivian, and we’re excited for the future,” RJ Scaringe, Founder and CEO of Rivian, said. “Rivian will continue to stay focused on creating best-in-class products and services that benefit our customers, helping to drive EV adoption.”
Wassym Bensaid and Carstein Helbing were named future co-CEOs of the joint venture and both said the partnership will make for a strong push to speed up innovation, pool resources and build toward future success.
In terms of the partnership itself, Volkswagen Group said they plan to invest $5.8 billion in Rivian and the joint venture by 2027, with an initial $1 billion already provided in the form of a convertible note.
When the joint venture closes, Volkswagen said they’ll invest roughly $1.3 billion as consideration for additional background IP licenses, as well as a 50% equity stake in the venture. The rest of the $3.5 billion is expected to be provided as equity, convertible notes and debt at future dates, the partnership announcement said.
[SIGN UP: WSB-TV Daily Headlines Newsletter]
©2024 Cox Media Group
