Rivian started life with significant investments from Ford, Amazon, and others, but the automaker has struggled with profitability in recent times. However, while it has delayed investments in new production facilities and conducted layoffs to cut costs, Rivian is still burning through its cash reserves. Volkswagen could be the one to save the day, as it recently announced a joint venture with the automaker that will inject $1 billion into its operations to start.
The partnership could net Rivian as much as $5 billion over time, giving it the much-needed funding required to develop and build its upcoming R2 and R3 vehicles. Volkswagen will gain access to Rivian’s advanced technologies, which will help it overcome some of the challenges it has had with its CARIAD software division. VW and Rivian also said they would work together to develop next-generation vehicle architectures.
VW Group CEO Oliver Blume said, “Our customers benefit from the targeted partnership with Rivian to create a leading technology architecture. Through our cooperation, we will bring the best solutions to our vehicles faster and at lower cost. We are also acting in the best interest of our strong brands, which will inspire with their iconic products. The partnership fits seamlessly with our existing software strategy, our products, and partnerships. We are strengthening our technology profile and our competitiveness.”
The initial $1 billion investment could swell with another $4 billion spread out over the next few years. Payments are contingent upon Rivian meeting “certain milestones,” but we don’t yet know what they are.
[Images: Rivian, VW]
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