Rivian Joins Forces With Volkswagen, the Germans Bring $5 Billion to the Table

Thanks to Volkswagen's involvement, R1T and R1S owners might soon be able to activate a wireless CarPlay or Android Auto connection. Don't get your hopes up; that's just wishful thinking for the time being. The Germans have been very open to adopting new tech, though.

Porsche, for example, showed a willingness to integrate Apple's automotive interface even deeper despite its newer models being powered by Android Automotive. They even included a large language model on most of their newer ID vehicles.

But until we get to see what the new VW–Rivian relationship will bring to the brands' rides, let's see what got them to collaborate.

The two companies just announced their intention to create a joint venture that should come up with a new all-electric architecture and "best-in-class" software technology. The Germans are supposed to invest $1 billion in Rivian at first, with an extra $4 billion after 2025. The current plan includes VW buying Rivian common stock in two $1 billion trenches next year and in 2026.

According to the press release available below, Rivian will take advantage of VW's rich automaking expertise, while the American company will share and improve its software with the Germans. The brands want new software-defined vehicles that will convince customers not to look elsewhere for their next ride.

Software is a very important topic for automakers, especially now that the industry is slowly moving away from the internal combustion engine and onto electric motors. They realized (mostly thanks to Tesla) that customers are willing to spend more money on digital products and like remaining connected while on the go. So, they want that revenue for themselves. That's why companies like BMW are trying to be as hip as Tesla by integrating video games into their newer rides.

But the real battle isn't about giving customers something to do with the screens in their cars while they're charging the high-voltage battery. It's about not sharing (too much) revenue with third parties. That's very complicated to achieve, but not impossible.

We'll see what Rivian and VW come up with in this regard. What's interesting is that the companies have been working together behind the scenes for quite some time. The Germans validated Rivian's latest electric architecture (which was simplified for the new R1T and R1S), and the joint venture is expected to become official before the end of the current year.

Finally, this feels like a major win for Rivian because it really needed the money. It has been hemorrhaging cash since it started selling the pickup truck and the three-row SUV. With the R2, R3, R3X, and the Georgia plant in sight, things need to be perfect. Rivian wants to become profitable as soon as possible.

However, it's also great news for VW. Last year, the Germans changed their futuristic software division, Cariad, because it didn't come up with something good. Customers were unhappy with what they found on the earliest ID models. Now, that's poised to change for the better.