Electric vehicle maker Rivian Automotive and the Volkswagen Group are teaming up in a nearly $6 billion deal to create a new technology company.
According to an announcement Tuesday, 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 to both companies’ future electrical systems . vehicles.
The transaction agreement between the two automakers was worth 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 realize together in the coming years. We have a clear plan to offer our customers the best products and digital experiences at attractive prices through advanced 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 strengthen their position in the global market.
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The announcement about the joint venture stated that the partnership will utilize Rivian’s current electrical architecture and software technology. This will allow the company to launch the Rivian R2 in the first half of 2026 while supporting the launch of the Volkswagen Group’s first models in 2027.
“Today’s completion of our joint venture with Volkswagen Group marks an important step forward in the world’s transition to electric vehicles. We are thrilled to see our technology being integrated into vehicles beyond Rivian, and we look forward to the future,” said RJ Scaringe, Founder and CEO of Rivian. “Rivian will continue to focus on creating the best products and services that benefit our customers and help drive electric vehicle adoption.”
Wassym Bensaid and Carstein Helbing were appointed future co-CEOs of the joint venture and both said the partnership will provide a strong impetus to accelerate innovation, pool resources and build future success.
As for the partnership itself, Volkswagen Group said it plans 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 bond.
When the joint venture closes, Volkswagen says it will invest approximately $1.3 billion in return for additional background IP licensing, as well as a 50% equity stake in the company. The remainder of the $3.5 billion is expected to be provided in the form of equity, convertible notes and debt at future dates, the partnership announcement said.
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