Rivian and VW Finalize Electrical Architecture and Software JV; VW UPS Investment to $5.8B

Wedoany.com Report-Nov 14, Rivian and Volkswagen have finalized their joint venture, Rivian and Volkswagen Group Technologies. VW will invest up to $5.8 billion by 2027, 16% more than the initial $5 billion first announced. The JV will be headquartered in Palo Alto, CA.

The joint venture is intended to create next-generation electrical architecture and vertically integrated software for electric vehicles. The 50/50 JV between Rivian and Volkswagen, co-led by Rivian’s Chief Software Officer Wassym Bensaid and VW’s Chief Technology Engineer Carsten Helbing, will leverage Rivian’s zonal architecture, supporting Rivian’s R2 in 2026 and VW models by 2027.

The partners said that the creation of the JV validates Rivian’s approach to vertical integration and leadership in electrical hardware and vehicle software, which combines with Volkswagen Group’s scaling capabilities and segment coverage.

The joint venture is expected to apply scalable technology across both Volkswagen Group’s and Rivian’s combined electric vehicle volumes and lower Rivian’s expenses while driving further inovation. Members from Rivian’s software and electrical hardware engineering teams will join the JV.

Future development costs for the shared electrical architecture and software stack will be shared between Rivian and Volkswagen Group.

Through 2028, Volkswagen Group will fund 75% of the shared platform osts within the JV while Rivian will fund 25%; each will fund 100% of the development costs exclusively designed for its own vehicles and business.

Shared cots will be split equally in 2029 and beyond; however in 2029 Volkswagen Group will fund an incremental $100 million per year of the shared costs.

Over the long-term, the partners expect to see an opportunity for material cost savings across electrical hardware components, creating a highly competitive zonal architecture cost structure.

VW has already invested $1 billion, with an additional $1.3 billion planned at the JV’s launch for IP licenses and equity.