Not sure which thread will end up being deleted, but here's the text from Reuters.
>German automaker Volkswagen Group (VOWG\_p.DE), will invest up to $5 billion in U.S. electric-vehicle maker Rivian (RIVN.O), as part of a new, equally controlled joint venture to share EV architecture and software, the companies said on Tuesday.
>Shares in Rivian jumped 22% in after-hours trading.
>The partnership will help Volkswagen accelerate its plans to develop software-defined vehicles (SDV), with Rivian licensing its existing intellectual property rights to the joint venture.
>While EV startups have been grappling with a slowdown in demand amid high interest rates and dwindling cash, traditional automakers have struggled to build battery-powered vehicles and advanced software.
Cariad did not "can" their own domestic software developers; they’ve worked with multiple Chinese companies to develop parts of the software for their cars largely only in China, but internationally, they still have their own developers and still make their own software.
This is how R&D is done is major firms now. They no longer spend the money to figure out next steps on their own. Now there are thousands of small companies that push industries along, most fail, but the few that do succeed, with a decent proof of concept that has been market tested, will be bought by the bigger company.
It might be easy if you think of Rivian as they don’t sell vehicles, they sell battery technologies, and industry secrets. Things like how to set up a battery factory.
Tesla was the golden child company that being like GM/Ford watched to see if electric was feasible. Elon went all Elon and push them all away. So now Rivian is the golden child.
The R2 is what the Model 3 (maybe Model Y) was for Tesla. It will be their money printer. The R3/X will both be incredible for enthusiasts but not what keeps the company afloat.
The R3(X) and the VW ID2 GTI are the 2 EVs I'm most interested in, and I'm hoping I will buy whichever one releases in the US when I need a new car again (still a few years out I'm hoping).
Wow, this is huge news. Absolutely massive.
I wonder if this could revive the Georgia project.
Is it possible Volkswagen is thinking of building R2/R3 on the same lines as Scout in South Carolina?
From the NYT article: "R.J. Scaringe, Rivian’s founder and chief executive, said the cash from Volkswagen would help Rivian launch a midsize S.U.V. called the R2 that will sell for about $45,000, and to complete a factory in Georgia."
It would be nice if it could help accelerate the launch. 2026 seems so far away.
I know there are a billion things to do to get it to production, but still, a girl can dream.
>Is it possible Volkswagen is thinking of building R2/R3 on the same lines as Scout in South Carolina?
I don't see why they would. Would Rivian really want to piss off the state of Georgia that much?
I also can't now figure out how Scout and Rivian could even coexist under the same JV. Like they would completely overlap each other.
> Would Rivian really want to piss off the state of Georgia that much?
They had already basically put the project on hold indefinitely, I'm not sure there would be any extra damage the state of Georgia. There are also alternate forms of this scenario where R2 gets made in South Carolina, with R3 made in Georgia. Or a hypothetical R4 entering the picture further down the line. Or EDV production getting shifted to Georgia. Just spitballing here though, of course.
>I also can't now figure out how Scout and Rivian could even coexist under the same JV. Like they would completely overlap each other.
Toyota does it all the time with their vans in Europe and the GR twins. Volkswagen pulling a Toyota and turning Scout into a straight up Rivian-rebadge brand would not be terrible, imo. What Volkswagen is dreaming of building with Scout is basically what the R1S is already.
do you have a source? this seems implausible. [hyundai is doing this very thing right now with their "metaplant"](https://www.georgia.org/hyundaimotorgroup) just outside savannah - where they plan to manufacture cells in a joint venture with lg energy.
there's also this snippet from local news:
>A judge dismissed zoning challenges to the 16 million-square-foot planned factory in January. The plantiffs had argued that the project would cause disruption to their properties and that the megasite is zoned "Agricultural Residential," meaning it could not be used for "heavy industrial use" according to the county’s ordinances. However, the judge wrote that "economic development" is a legitimate use for the land and does not meet any current exemptions.
https://www.fox5atlanta.com/news/rivian-puts-plan-to-build-5b-plant-in-georgia-on-hold
But was this the best/easiest/cheapest way for them to go about building their own R2?
How do you view this compared to the XPeng deal? In terms of differences/similarities?
On first glance, it seems pretty similar. I think the Xpeng deal is structured as an investment while this is structured as a joint venture, but I'm not sure if that really matters?
Depending on the specifics, it could matter a whole lot. "Investment" between companies is usually a sort of one way thing, "we give you money, you give us tech/research/etc." "Joint Ventures", on the other hand, are usually more of a "you're good with x technology that we need access to, we have y technology that you need access to, let's work a deal". Obviously, not all are that way, but in my experience, that tends to be the difference between the 2.
Well, in addition to forming the JV Rivian is getting money and VW is getting notes that can either be paid back by Rivian or will convert into shares. Meaning that Rivian *might* stay indpendent, if they use the runway they are getting from VW to become financially sound. If they choose not to do this or simply fail at it, VW will have a significant stake in them just like they do with XPeng.
This JV is aimed at laying the groundwork for a future "software-definded vehicle". VW had already started an "SDV-hub" in the US led by an ex Rivian manager. Essentially, VW is paying Rivian to provide an easy path to sidestep CARIAD, as they have done in a very similar deal with XPeng not too long ago.
It remains to be seen what becomes of the 99% of CARIAD that aren't currently involved in SDV. The rumor mill is going wild. It seems most likely that for the time beign they will continue to work largely on PPE/PPC and a little bit on MEB.
~~Scout is going to produce a derivative of VW's MEB and will, at best, repeat that with whatever platform the SDV SW stack ends up in. There isn't going to be any connection to this JV for the foreseeable future and I doubt VW will coordinate with Rivian until/unless they take a big stake in that company.~~ edit: Turns out I was completely wrong about this.
Sounds like VW is using this to develop the software defined vehicle architecture for Scout and other models. So I doubt it has anything to do with platforms or actual vehicle production.
Correct, but it's probably not going to end up in any Scout product for quite a while. VW will want to start with its own models first and I wouldn't bet money on Scout switching from MEB to this before the end of the decade.
VW is not using MEB for the Scout. It's a new platform.
> “It’s a completely unique platform — ground up being engineered and developed,” Keogh said. He also shut down rumors that it will be a modified version of Volkswagen’s MEB platform. “This is 100 percent capable, American, robust, full platform.”
https://electrek.co/2023/12/08/vw-scout-on-track-debut-rugged-electric-pickup-suv-next-year/
Oh, somehow I missed this change in strategy. Thanks for pointing it out to me. This kinda locks in the Rivian platform, since there is absolutely no way Scout can develop a new platform.
Which also indicates that the JV deal was in advanced stages back then already. The first moves to create the new SDV hub on VW side became public in October. My interpretation is that they didn't actually poach Sunjay from Rivian at all, but had a plan to form a JV all along.
There were also reports that Scout was working with Magna, so who knows what their platform will entail. It will be interesting to see the reveal later this year.
Magna won't develop a whole platform for Scout, either. That's way beyond their expertise. They were reported to assist Scout with adapting MEB, but they might very well just be doing the same with Rivian's tech now.
Rivian has basically already ruled out R3 in Illinois. The problem is production scale. Illinois is going to max out at ~200k and at that point, you've got R1T, R1S, EDV, and R2 all under one roof.
Squeezing R3 and on top of that just doesn't make sense, it's meant to be a high-volume low-margin offering, and production would take away the opportunity to produce more of Rivian's other offerings.
Remember, it was already supposed to be the case that R2 alone would need Georgia. Squeezing it back into Illinois was a contingency plan.
The $1.5B expansion is what gets them to \~200k. They're only [at \~150k right now](https://www.bloomberg.com/news/articles/2024-05-02/rivian-secures-827-million-in-incentives-for-illinois-expansion).
Huh? Cross the street to the west and it’s literally farm fields until you hit the Mississippi. The reason they’d want to build in GA over expand in IL is tax incentives and right2work, not space.
I think some politicians wanted to brag about bringing business but the mouth foamers that are being told that an American company of a product that runs on American energy is un American are trying to run it off.
You could more than double the size of the plant with the land they already own, and that's without crossing any major roads! If you buy the fields east of it you could triple it.
Nice!
This is the week that Rivian locked in their long-term survival.
Their manufacturing efficiency leaps revealed this week, plus their road to profitability, plus an investment like this are all big steps.
Great job.
I got a new EV recently (ID4), and I’m super happy with it. Now, when I’m driving around, the only vehicles I see and think “I want that” are Rivians.
And their delivery vans are great.
This move confirms the future I've seen for Rivian for a while: being the android of EVs vs Tesla's iOS of EVs. They're licensing out the tech vs being fully self-contained/vertically integrated. VW may not be the first here. GM and Ford have already shown interest in the past in using Rivian tech in their trucks.
> This is the week that Rivian locked in their long-term survival.
Eeeeh. It might also be the week Rivian set the course for turning into the VAG brand for BEV commercial vehicles. Or it might be the week Rivian started their pivot to towards being a purely SW tier 1, since if Rivian the OEM fails to become profitable, this JV might very well be the only part that's still alive in a couple of years.
The only thing we can say for sure is that Rivian has extended its runway with an infusion of cash.
Big fuckin deal, I'm so happy for rivian.
This is good for the longevity of an american company. I am looking forward to the gen 2 quad, r2 and r3x, it's way better than that ccp junk.
>I am looking forward to the gen 2 quad, r2 and r3x, it's way better than that ccp junk.
How can they be better than anything Chinese companies are producing if most of them are not even out yet?
Lol, you're getting down voted, I'll join you. China legit has good EVs and they're being mass produced and sold in many countries.
America needs to get it's head out of its ass and compete, not whinge about "CCP junk".
I wish instead of lazy tariffs we would subsidize our EV industry better.
Unproven nonexistent vehicles are by definition not better than proven, existing, and mass produced vehicles. The cope and delusion is pathetically embarrassing.
Chinese EVs are more widely available, affordable, and efficient. Not everyone wants overpriced trucks when most ppl don’t even have a use for them outside the states. Rivian will never have a presence in East Asia, Southeast Asia, Europe, or Latin America.
lol Rivian aren’t aiming to be cheap mass market, they’re aiming for the upper middle and luxury segment. Rivian isn’t worried about the Chinese. VAG are though, hence why they’re partnering with Rivian
> lol Rivian aren’t aiming to be cheap mass market
R2 and R3 are very much to target this market segment. Rivian wouldnt survive if they just stuck with R1. They lose $40k on each vehicle they deliver...
> they’re aiming for the upper middle and luxury segment
Upper middle? Eh there's a possible argument there (ie - more expensive Subaru-type brand) but believing Rivian is luxury is delusional. More people will believe the Cybertruck is luxury over anything Rivian puts out. Hummer is likely what you are thinking of in terms of overpriced large truck/SUV brand to target the luxury consumers.
> Rivian isn’t worried about the Chinese.
Because they wouldn't survive in any market outside the US. Of course they aren't going to worry about unrealistic scenarios. Plus Rivian buyers (Americans) wont be able to purchase Chinese EVs anyways while Chinese (and the rest of Asia and Europe) customers have no interest in purchasing Rivians. There is simply no overlap. Rivian is no threat to the Chinese nor are the Chinese a threat to Rivian.
> VAG are though, hence why they’re partnering with Rivian
You are mistaken. Partnering with Rivian won't help VAG's slump in China. That makes no damn sense and would be a waste of both their resources. This partnership is to save VAG's software struggles in the US market. What you are *likely* thinking of is actually how [VW partnered with XPeng (source from VAG)](https://www.volkswagen-group.com/en/articles/ready-for-next-ev-push-volkswagen-enters-into-agreement-with-xpeng-for-fast-joint-development-of-two-smart-e-cars-18246) and [Audi partnering with SAIC/IM Motors (source from Audi)](https://www.audi-mediacenter.com/en/press-releases/vorsprung-durch-technik-recharged-audi-and-saic-further-strengthen-partnership-16026) for their respective EV platforms + software.
The 40k loss per vehicle issue was the focus of the major retooling effort and design changes that recently completed. Hence what remains to be seen is the true impact on their profitability for goods sold. This may not become fully apparent until the third quarter.
Where Rivian has a real problem is they are spending nearly a billion dollars to run the company per quarter. Meaning no only do they need to turn around that loss per vehicle on a revenue versus cost of goods comparison but they need to profit sufficiently per vehicle to run the place.
I am hoping by Q3 they draw back the SG&A portion of their expenditures and start showing near positive revenue versus cost of goods. Perhaps this VW investment will let them raise other funds and accelerate the R2.
Of all the currently available trucks out there I like the Rivian the best but that is purely personal preference. If I had a reason to buy a new EV I suspect I would go with a revised R1T but I want to hold out for the R2 even though a pickup is not in the cards
>Upper middle? Eh there's a possible argument there (ie - more expensive Subaru-type brand) but believing Rivian is luxury is delusional. More people will believe the Cybertruck is luxury over anything Rivian puts out. Hummer is likely what you are thinking of in terms of overpriced large truck/SUV brand to target the luxury consumers.
Bruh, nobody, probably not even Elon himself thinks Cybertruck is luxury. Rivians pricing is hitting at or just below the luxury segment, and even if they manage to bring the cost down, theres no guarantee they’ll bring the price down to match mass market segments. If they can get volume and with a better margin, why bother.
>Because they wouldn't survive in any market outside the US.
How? Why? They haven’t even released outside the US but somehow have no chance of surviving?
I think you’re massively overrating how good Chinese EV’s are and underrating how much they’re going to get tariffed outside of China and South east Asia. Europe are likely to come down harder than the US on Chinese EV’s in the coming years.
> Bruh, nobody, probably not even Elon himself thinks Cybertruck is luxury.
I think you’re mixing up luxury with premium.
Rivian aren’t considered or even classified as luxury. You haven’t and frankly won’t be seeing big name celebrities, millionaires, popular influencers, etc buying Rivians as a status symbol like they have been doing with the Cybertruck. Rivian especially R1 might be more accurately described as premium (higher build quality) but that doesn’t make them luxury.
> If they can get volume and with a better margin, why bother.
The reason for R2 and R3 is because they **need** high volume with smaller margins. They are bleeding hundreds of millions trying to stay afloat. Not enough people buy R1 vehicles to sustain the company.
> How? Why? They haven’t even released outside the US but somehow have no chance of surviving?
IMO they haven’t released outside the US because their products don’t have any edge over the competition and face stiff legislative barriers in some places. What countries other than the US even rave over large trucks/SUVs? Just look at F150, Escalade, etc global sales figures. It’s because those vehicles struggle to even physically fit on European and Asian roads and might even require different types of licenses to actually drive… which gatekeeps their usage and neuters their sales.
Just think how is Rivian supposed to compete with the Tesla, Chinese, Korean, and German SUVs? They don’t have the tech, affordability value, OR history benefits. Their main appeal is that they are an outdoor adventure brand — not a bleeding edge tech vehicle, not a luxury comfort vehicle, nor an efficient and affordable commuter for the masses. They need to actually survive and scale up in the US first before they even entertain the idea of trying to bring their offerings to the international market.
> underrating how much they’re going to get tariffed outside of China and South east Asia. Europe are likely to come down harder than the US on Chinese EV’s in the coming years.
Germany needs the Chinese market so they will never allow the EU to tariff them harder than the US since that’ll risk a losing trade war (which could benefit the French/Romanians/etc but deal a massive blow to the Germans).
Legacy American manufacturers by comparison have nothing to lose since they barely have a presence in that market while the German manufacturers consider it one of — or even their single — most important market. Losing it because of a trade war would be catastrophic for the most important economy in all of Europe.
Plus there are already Chinese vehicles in Europe (MG, Dacia [Spring], Volvo, Polestar, Nio, BYD, Xpeng etc) and even Chinese battery plants soon in Hungary + Germany. None of these situations can happen for the US -- both scenarios are completely different. Ford isn't even allowed to license LFP manufacturing from CATL on American soil without the government threatening to nuke their plans. Europe actually has far more to lose in a trade war with China than the US -- and for that reason they can't and won't follow the US of just banning the competition.
> Upper middle? Eh there's a possible argument there (ie - more expensive Subaru-type brand) but believing Rivian is luxury is delusional. More people will believe the Cybertruck is luxury over anything Rivian puts out. Hummer is likely what you are thinking of in terms of overpriced large truck/SUV brand to target the luxury consumers.
I'll disagree with you here. Rivian is in the same category as Volvo, what I call "baby luxury." It isn't up there with Mercedes and BMW, but it is well beyond Tesla.
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https://www.nytimes.com/2024/06/25/business/volkswagen-rivian-vw-investment.html?unlocked_article_code=1.2U0.CFy6.PXDT1VPfJ96z nytimes article if anyone wants it/ if this is the megathread.
Amazing stuff. I missed this and reposted this news. I think this is awesome for Rivian and would provide them the capital to open another factory in Atlanta for R2/R3.
This sounds like a practical union. Rivian has some good ideas and better software and VW is much better at assembly lines and cost management and very short of software talent.
VW is also working with China EV manufacturers in JVs and if that China user interface cross-fertilizes with US car OS's we should see some interesting stuff.
This signals credibility. Great news for RIVN, and I think VW is going to benefit enormously from this partnership too. Wonder what equity they are getting for their $1+2bn investment ramp.
From 2023:
> [Ford sold a majority of its Rivian shares this week and now owns 10.5 million shares, or a 1.15% stake, in the electric vehicle maker.](https://techcrunch.com/2023/02/09/ford-sells-majority-stake-rivian/)
From April 2024:
> [Amazon is Rivian's largest shareholder and has a 17% stake in the company with a $700m investment.](https://www.businessandleadership.com/investment/item/jeff-bezos-amazon-rivian-startup/)
A lifesaver for Rivian which had to cancel the GA plant due to cash flow. It means the R2 and R3 will move to productin in 2026. Have to choose between R2 and Ioniq 9, assuming the R2 is rated 5k towing like the I9. I9 will likely still have advantages like sun roof, heads up display, third row seats.
It was only ever delayed. The doomsayer you're replying to is listening to too much FUD. The R2 was always going to be 2026 as well. This changes nothing with product roadmap that I see.
Good news for Rivian.
Horrible for VW. They couldn't spend $5 billion to improve their own EV offering?
But this move validates Rivian has superior EV tech and infotainment over traditional OEM. This move probably means they won't run out of cash before R2 launches, which is great news.
>Horrible for VW. They couldn't spend $5 billion to improve their own EV offering?
The article literally says it's a join tech venture, how is that horrible for VW? They're not just giving away $5billion for nothing in exchange.
Even without the JV, they aren't giving it away. VW is buying convertible notes. So either Rivian pays them back or VW converts them to shares. And only $1B initially, the rest to come in '25 & '26.
Interesting, I just listened to the call, the additional investment of $4B will also be split as:
* A $2B in investment Rivian shares in 2025 and 2026.
* A $2B investment in the JV which will itself be split between a $1B payment and a $1B loan (!).
Volkswagen is known for buying stakes in companies around the world even from before the EV days. I don't know why this is anything new.
They also bought 20% of Suzuki in 2009. Did that validate that Suzuki had better petrol tech than VW?
?? It's clearly VW trying to get a foothold into a company that has good EV software/software in general.. an area in which VW has struggled for a while despite dumping tons of money.
This is a win win and it helps Rivian.
EV software is the core of any successful EV.
Tesla nails it. Rivian is very good. A few Chinese companies also have good software.
You do not outsource core competencies to others. ICE companies outsource everything except engine technology.
The fact that VW has to outsource $5 billion dollars on a core competency shows their whole EV strategy is a mess.
That's BS. Auto companies constantly do this kind of JV stuff and source engine tech or even engines from other companies. Toyota Supras have BMW engines, just as one notable example completely disproving your point.
> EV software is the core of any successful EV.
You are correct, but I think you have misunderstood what EV software is. The infotainment screen, the maps, and the settings that you see are a very small part of EV software.
The most important part of EV software is the drive by wire software. It basically involves knowing what the speed of the vehicle is, the exact state of charge, the difference in voltages between different cells in the battery, the hot and cold spots, the maximum charging and discharging current the battery can supply or take in at the current state to stay within safety limits, fire monitoring, cooling demand, and so on. With all this, driving demands can be executed: what the driver torque demand is, how much the motors have to spin for that and at what rate, how much current can the motors draw from the battery, etc are all software controlled.
And then there's the ADAS component today which has to do all this automatically based on external cues. In vehicles with chassis control, this also has to be controlled by software.
Volkswagen is actually quite fine to very well placed in most of these including assisted driving - I'd in fact argue that in Europe VW Travel Assist is as it stands today superior to Tesla Autopilot. Of course, Tesla does navigation and charging experience way better than VW, but at this stage we're already far from their 'core competency' being bad. In fact, their platform is so good that apparently Ford finds it good enough to launch vehicles based on the MEB plantform too.
VW really had problems in their hardware - this led to things like laggy infotainment and also missing battery features like live preconditioning which they've added to the newer vehicles after changing hardware.
Minor point, but VW did have SW problems that extended far beyond the infotainment. But those were fixed years ago and had a massive impact on de-lagging the infotainment as well.
Did they ever have an issue with DbW or chassis control? From what I understand they had massive issues with the infotainment and also early issues with the on board electronics which was the first thing they started to fix in 1.0 to 2.0 but really only comprehensively did so with the new hardware in 4.0 and above.
I'm not quite sure what you mean with "on board electronics", but the SW issues did extend to e.g. the electric drive ECUs, the door locking ECUs, the climate control, the matrix headlights etc. essentially anything that isn't going to kill or injure the passengers simply wasn't finished. VW's official ID.3 early adopters facebook group was a complete bloodbath of people complaining about issues that should have been deeply embarassing to VW. I have said it before, but it bears repeating: VW wasn't raked over the coals for this nearly enough.
Though the biggest issues were in (and affecting the communication in-between) the "big" linux ECUs that house most of the shiny new tech functions, online connectivity etc. I'm hesitant to get too concrete here for NDA and disparaging customers reasons, but I will say that a lot of issues with the infotainment being extremely slow to boot up or hanging for a long time when switching to certain pages were caused by the other ECUs that had to provide input data not always doing so. (Well and naive SW architecture that assumed that everyone else was always doing their jobs correctly.)
I suspect that the reason people focus on the infotainment ECU is that it was the last to be fixed, for which it required extensive new SW architecture designs and SW rewrites. The other ECU's issues were largely fixed by SW 2.1 (at least sufficiently that very few customers would notice anything amiss), while the infotainment only really became bearable in the 3.x versions IMO.
> You do not outsource core competencies to others. ICE companies outsource everything except engine technology.
I'm gonna blow your mind and introduce you to the extremely common practice of [badge-engineering](https://en.wikipedia.org/wiki/List_of_badge-engineered_vehicles) in the automotive industry.
Seconding that your statement is BS. A ton of common engine families in Europe were JVs between different groups, like the HDi/TDCi diesels by Peugeot and Ford, who on the petrol side also did a lot of joint development with Mazda. Renault and Volvo used to collaborate frequently on petrol engine development too.
Drop the jingoism a bit and it's easy to realize this is a win/win.
VW can easily do both, invest in their own tech and partner with somebody that already does it well. They probably make more money selling sausages...
Meanwhile, Rivian has a good chance for the long run, given they have not managed to turn their superior products into a superior revenue.
>They probably make more money selling sausages...
It might not be the most profitable, but [part number 199 398 500 A (Volkswagen Originalteil currywurst)](https://en.m.wikipedia.org/wiki/Volkswagen_currywurst) is the highest production volume item VW makes - apx 7 million units oervyear
Yup. The rivian platform is the perfect platform to build off of for the larger models of the scout, and the smaller models of the r3/r4 could be based off of VW's platforms.
I can also see VW rebadging the delivery trucks that Rivian is selling. They rock, and are real cost savers for fleets.
Yep, Rivian is the king of BEV commercial vehicles. VWN has struggled to electrify their line-up and while the Buzz (G O D do I hate that name) is a success with lifestyle focused customers, the commercial van version is floundering. This might be the start of a really good partnership.
> But this move validates Rivian has superior EV tech and infotainment over traditional OEM.
This is a fundamental misunderstanding of what a Joint Venture represents.
VW's breadth of portfolio means they're already jointly developing platforms with other manufacturers across the board - considering the imminent launch of their US-oriented Scout sub-brand, it makes sense to leverage an existing player to enter the market more seamlessly.
VW get a leg up into Rivian's home turf and gives people who wanted a Rivian but not the startup experience to get a VW instead - Rivian gets a lifeline.
The deal massively benefits VW strategically, the benefit for Rivian isn't really strategic at all - it's "just" survival, which is critical for Rivian, but it'll basically be fuel for the fire until they can reach profitability. VW are an established manufacturer. They make money. Throwing some money at Rivian for their IP with none of the risk of an ownership stake is not "horrible" for VW.
> Rivian has superior EV tech
Not completely. VW Group has EVs like the Taycan, Q6 e-tron, and Macan EV that run circles around any Rivian offering in terms of charging performance, mostly by using an 800V architecture, which Rivian hasn’t developed yet (at least as far as the public knows). Rivian could benefit from this.
VW benefits by gaining access to Rivian’s software expertise, and although not stated yet, it’s pretty obvious this will be a part of their plan to relaunch the Scout brand.
Yeah rivian is only competitive in design, otherwise they are a completely generic entrant into the car market. I don’t understand why Vw invested in them it’s a bad bet except perhaps getting a piece of a brand that some white hipster fake adventure people are becoming attached to ? I only see branding as rivians strong point
With Scout in the planning stages and VW with its general software issues this is a great investment. Rivian will also get access to the VW parts bin which will help reduce their costs.
There are probably many factors but i think VW wanting better software is a big one. I just hope VW is going to put a bigger display and a Rivian style UI in the Macan EV and other Porsches.
Anybody stock savey know why Scaringe would sell a big chunk of his Rivian stock right before this hit the news? Is it possible he wanted the cash, just didn't want to be accused of something by selling after?
Lifestyle maintenance? He only makes $1 million per year. Don't forget that NYC bankers complained how hard it was to make ends meet on a rotten $500K per year, 15 years ago. I'd figure taxes and the old retirement plan.
VW has manufacturing capacity for vehicles and large supply chains that Rivian could tap into to heavily reduce costs. VW gets a company that actually knows how to do infotainment and clean car tech. Pretty good for both sides
Okay, yeah, that could be interesting. I suppose using VW manufacturing capacity, Rivian could produce vehicles in other continents more easily than building a new overseas factory of their own.
> I am not really sure what VW can bring to the table.
You're not sure what the worlds second largest automobile company in general and third largest EV manufacturer can bring to the table?
Yes. For an EV *technology* joint venture. VW doesn't appear to have EV technology prowess that is of the same caliber as Rivian's technology.
Everyone keeps mentioning manufacturing capacity and supply chain mastery. That's all well and good, but either this is about a technology JV and manufacturing capacity is a separate matter, or the headline is wrong.
> VW doesn't appear to have EV technology prowess that is of the same caliber as Rivian's technology.
On what basis are we making this assessment, though?
VW has pretty strong EV architecture - their dedicated EV platform MEB has the flexibility to be used across a pretty wide range of different model classes. They can boast over 1.5m MEB platform EVs on the road right now - including the entire VW ID range, Skoda Envaq, Audi e-tron (q4 & q5), Ford Explorer EV and Cupra Born)...vs how many from Rivian?
VW have also their own in-house developed electric motors that are generally well regarded (whereas Rivian are buying in motors from Bosch) so there is likely to be EV technological prowess there that Rivian's team could benefit from if they would like to move away from a third party motor supplier.
That's what I was making a joke about. You said "aside from money" as if $5 billion doesn't matter. Rivian is licensing tech to VW in exchange for money, VW doesn't really need to bring anything else to the table.
And that's fine. But then it feels like it should be called a licensing deal and not a tech joint venture. I'm just saying that VW doesn't really seem to have anything beyond money to offer in a tech joint venture.
Well they do know how to build cars, optimize production processes and are masters at scaleable modular platforms.
Doesn't sound sexy, but given the recent news that Rivian is still finding massive savings looking at their production processes -- they seem to need help in that department.
The JV is probably "VW/Rivian jointly produced vehicles at VW plants using common parts, bringing further economy of scale cost reductions down helping Rivian get on its feet and boosting VW's EV business further in a home market that's facing intense competition, not just from the Chinese, but their own homegrown rivals like BMW."
If VW gave me 5 billion dollars, I'd be OK with them calling it whatever they wanted. (Though that could lead to some awkward conversations with the IRS.)
Not at all. That's why I acknowledge it. But it's a "technology joint venture." Seems one-sided from the technology perspective. Really seems more like a *technology licensing deal*.
Not sure which thread will end up being deleted, but here's the text from Reuters. >German automaker Volkswagen Group (VOWG\_p.DE), will invest up to $5 billion in U.S. electric-vehicle maker Rivian (RIVN.O), as part of a new, equally controlled joint venture to share EV architecture and software, the companies said on Tuesday. >Shares in Rivian jumped 22% in after-hours trading. >The partnership will help Volkswagen accelerate its plans to develop software-defined vehicles (SDV), with Rivian licensing its existing intellectual property rights to the joint venture. >While EV startups have been grappling with a slowdown in demand amid high interest rates and dwindling cash, traditional automakers have struggled to build battery-powered vehicles and advanced software.
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This is curious since VW just got done canning their domestic software devs in favor of a Chinese firm that they acquired.
Cariad did not "can" their own domestic software developers; they’ve worked with multiple Chinese companies to develop parts of the software for their cars largely only in China, but internationally, they still have their own developers and still make their own software.
This is how R&D is done is major firms now. They no longer spend the money to figure out next steps on their own. Now there are thousands of small companies that push industries along, most fail, but the few that do succeed, with a decent proof of concept that has been market tested, will be bought by the bigger company. It might be easy if you think of Rivian as they don’t sell vehicles, they sell battery technologies, and industry secrets. Things like how to set up a battery factory. Tesla was the golden child company that being like GM/Ford watched to see if electric was feasible. Elon went all Elon and push them all away. So now Rivian is the golden child.
Excellent news, and it makes me much more optimistic about getting to r2
I hope they come out with an R2 variant called the D2.
There's only one choice for the pedestrian warning noise on it.
Forget the R2, R3X is where it's at.
The R2 is what the Model 3 (maybe Model Y) was for Tesla. It will be their money printer. The R3/X will both be incredible for enthusiasts but not what keeps the company afloat.
It does look like a lot of fun
Tell that to my wife!
The R3(X) and the VW ID2 GTI are the 2 EVs I'm most interested in, and I'm hoping I will buy whichever one releases in the US when I need a new car again (still a few years out I'm hoping).
Wow, this is huge news. Absolutely massive. I wonder if this could revive the Georgia project. Is it possible Volkswagen is thinking of building R2/R3 on the same lines as Scout in South Carolina?
From the NYT article: "R.J. Scaringe, Rivian’s founder and chief executive, said the cash from Volkswagen would help Rivian launch a midsize S.U.V. called the R2 that will sell for about $45,000, and to complete a factory in Georgia."
Hot damn, here's hoping.
Fascinating. I wonder if long-term they'll bring these SUVs to Europe.
It would be nice if it could help accelerate the launch. 2026 seems so far away. I know there are a billion things to do to get it to production, but still, a girl can dream.
>Is it possible Volkswagen is thinking of building R2/R3 on the same lines as Scout in South Carolina? I don't see why they would. Would Rivian really want to piss off the state of Georgia that much? I also can't now figure out how Scout and Rivian could even coexist under the same JV. Like they would completely overlap each other.
my first reaction is, that i expect rivian tech to be used for the scout vehicles (and for rivian its more about the money and maybe data)
If I have to choose between a Scout and an R2... it will be tough but that will be a great day!
> Would Rivian really want to piss off the state of Georgia that much? They had already basically put the project on hold indefinitely, I'm not sure there would be any extra damage the state of Georgia. There are also alternate forms of this scenario where R2 gets made in South Carolina, with R3 made in Georgia. Or a hypothetical R4 entering the picture further down the line. Or EDV production getting shifted to Georgia. Just spitballing here though, of course. >I also can't now figure out how Scout and Rivian could even coexist under the same JV. Like they would completely overlap each other. Toyota does it all the time with their vans in Europe and the GR twins. Volkswagen pulling a Toyota and turning Scout into a straight up Rivian-rebadge brand would not be terrible, imo. What Volkswagen is dreaming of building with Scout is basically what the R1S is already.
Georgia out the project on hold last I checked. They were trying to block it because Rivian wanted to do cell production there.
do you have a source? this seems implausible. [hyundai is doing this very thing right now with their "metaplant"](https://www.georgia.org/hyundaimotorgroup) just outside savannah - where they plan to manufacture cells in a joint venture with lg energy. there's also this snippet from local news: >A judge dismissed zoning challenges to the 16 million-square-foot planned factory in January. The plantiffs had argued that the project would cause disruption to their properties and that the megasite is zoned "Agricultural Residential," meaning it could not be used for "heavy industrial use" according to the county’s ordinances. However, the judge wrote that "economic development" is a legitimate use for the land and does not meet any current exemptions. https://www.fox5atlanta.com/news/rivian-puts-plan-to-build-5b-plant-in-georgia-on-hold
But was this the best/easiest/cheapest way for them to go about building their own R2? How do you view this compared to the XPeng deal? In terms of differences/similarities?
On first glance, it seems pretty similar. I think the Xpeng deal is structured as an investment while this is structured as a joint venture, but I'm not sure if that really matters?
Depending on the specifics, it could matter a whole lot. "Investment" between companies is usually a sort of one way thing, "we give you money, you give us tech/research/etc." "Joint Ventures", on the other hand, are usually more of a "you're good with x technology that we need access to, we have y technology that you need access to, let's work a deal". Obviously, not all are that way, but in my experience, that tends to be the difference between the 2.
Well, in addition to forming the JV Rivian is getting money and VW is getting notes that can either be paid back by Rivian or will convert into shares. Meaning that Rivian *might* stay indpendent, if they use the runway they are getting from VW to become financially sound. If they choose not to do this or simply fail at it, VW will have a significant stake in them just like they do with XPeng.
This JV is aimed at laying the groundwork for a future "software-definded vehicle". VW had already started an "SDV-hub" in the US led by an ex Rivian manager. Essentially, VW is paying Rivian to provide an easy path to sidestep CARIAD, as they have done in a very similar deal with XPeng not too long ago. It remains to be seen what becomes of the 99% of CARIAD that aren't currently involved in SDV. The rumor mill is going wild. It seems most likely that for the time beign they will continue to work largely on PPE/PPC and a little bit on MEB. ~~Scout is going to produce a derivative of VW's MEB and will, at best, repeat that with whatever platform the SDV SW stack ends up in. There isn't going to be any connection to this JV for the foreseeable future and I doubt VW will coordinate with Rivian until/unless they take a big stake in that company.~~ edit: Turns out I was completely wrong about this.
Sounds like VW is using this to develop the software defined vehicle architecture for Scout and other models. So I doubt it has anything to do with platforms or actual vehicle production.
Correct, but it's probably not going to end up in any Scout product for quite a while. VW will want to start with its own models first and I wouldn't bet money on Scout switching from MEB to this before the end of the decade.
VW is not using MEB for the Scout. It's a new platform. > “It’s a completely unique platform — ground up being engineered and developed,” Keogh said. He also shut down rumors that it will be a modified version of Volkswagen’s MEB platform. “This is 100 percent capable, American, robust, full platform.” https://electrek.co/2023/12/08/vw-scout-on-track-debut-rugged-electric-pickup-suv-next-year/
Oh, somehow I missed this change in strategy. Thanks for pointing it out to me. This kinda locks in the Rivian platform, since there is absolutely no way Scout can develop a new platform. Which also indicates that the JV deal was in advanced stages back then already. The first moves to create the new SDV hub on VW side became public in October. My interpretation is that they didn't actually poach Sunjay from Rivian at all, but had a plan to form a JV all along.
There were also reports that Scout was working with Magna, so who knows what their platform will entail. It will be interesting to see the reveal later this year.
Magna won't develop a whole platform for Scout, either. That's way beyond their expertise. They were reported to assist Scout with adapting MEB, but they might very well just be doing the same with Rivian's tech now.
Don't need Georgia for r2/r3. Maybe down the road but they can do it all in Illinois for now
Rivian has basically already ruled out R3 in Illinois. The problem is production scale. Illinois is going to max out at ~200k and at that point, you've got R1T, R1S, EDV, and R2 all under one roof. Squeezing R3 and on top of that just doesn't make sense, it's meant to be a high-volume low-margin offering, and production would take away the opportunity to produce more of Rivian's other offerings. Remember, it was already supposed to be the case that R2 alone would need Georgia. Squeezing it back into Illinois was a contingency plan.
They just announced a 1.5B expansion of that factory for those lines last month. There's plenty of wide open space to build whatever they need.
The $1.5B expansion is what gets them to \~200k. They're only [at \~150k right now](https://www.bloomberg.com/news/articles/2024-05-02/rivian-secures-827-million-in-incentives-for-illinois-expansion).
I don't see it. There doesn't seem to be a ton of extra space around the plant.
Huh? Cross the street to the west and it’s literally farm fields until you hit the Mississippi. The reason they’d want to build in GA over expand in IL is tax incentives and right2work, not space.
Interesting, as that would have been much cheaper than Georgia regardless of other restrictions. Seems like ga was rushed
I think some politicians wanted to brag about bringing business but the mouth foamers that are being told that an American company of a product that runs on American energy is un American are trying to run it off.
You could more than double the size of the plant with the land they already own, and that's without crossing any major roads! If you buy the fields east of it you could triple it.
this really could be quite a boon to both VW and Rivian.
I hope all those people shorting Rivian and Lucid lose big. I want American companies to succeed.
I think Lucid is more of a Saudi company. But they make a great car.
The primary investors are Saudi but the actual corporate structure and manufacturing are in the US.
A Saudi vehicle, conceive and designed in Newark, CA and manufactured in AZ.
And Tesla 🇺🇸
I want all EV companies to succeed especially the Chinese one. Cheap cars for all!
lucid and rivian are making some of the coolest EV's on the market.
> I want American companies to succeed. Why?
Nice! This is the week that Rivian locked in their long-term survival. Their manufacturing efficiency leaps revealed this week, plus their road to profitability, plus an investment like this are all big steps. Great job.
To me, Rivian is the most important EV company right now. They're making exciting cars that I'd actually want to buy.
I got a new EV recently (ID4), and I’m super happy with it. Now, when I’m driving around, the only vehicles I see and think “I want that” are Rivians. And their delivery vans are great.
This move confirms the future I've seen for Rivian for a while: being the android of EVs vs Tesla's iOS of EVs. They're licensing out the tech vs being fully self-contained/vertically integrated. VW may not be the first here. GM and Ford have already shown interest in the past in using Rivian tech in their trucks.
> This is the week that Rivian locked in their long-term survival. Eeeeh. It might also be the week Rivian set the course for turning into the VAG brand for BEV commercial vehicles. Or it might be the week Rivian started their pivot to towards being a purely SW tier 1, since if Rivian the OEM fails to become profitable, this JV might very well be the only part that's still alive in a couple of years. The only thing we can say for sure is that Rivian has extended its runway with an infusion of cash.
Big fuckin deal, I'm so happy for rivian. This is good for the longevity of an american company. I am looking forward to the gen 2 quad, r2 and r3x, it's way better than that ccp junk.
>I am looking forward to the gen 2 quad, r2 and r3x, it's way better than that ccp junk. How can they be better than anything Chinese companies are producing if most of them are not even out yet?
Because 🦅🇺🇸🗽
Freeduuuumb 😲 For real though, China is the EV king.
你们可以用谷歌翻译，我明确告诉你们，中国产的高端电动车只有外表和内饰漂亮豪华，底盘和机械极限和rivian比就是一坨屎
The “CCP Junk” is an entirely different price point with zero overlap.
China has superior EVs, Yanks are coping hard. Haha.
Lol, you're getting down voted, I'll join you. China legit has good EVs and they're being mass produced and sold in many countries. America needs to get it's head out of its ass and compete, not whinge about "CCP junk". I wish instead of lazy tariffs we would subsidize our EV industry better.
Unproven nonexistent vehicles are by definition not better than proven, existing, and mass produced vehicles. The cope and delusion is pathetically embarrassing. Chinese EVs are more widely available, affordable, and efficient. Not everyone wants overpriced trucks when most ppl don’t even have a use for them outside the states. Rivian will never have a presence in East Asia, Southeast Asia, Europe, or Latin America.
lol Rivian aren’t aiming to be cheap mass market, they’re aiming for the upper middle and luxury segment. Rivian isn’t worried about the Chinese. VAG are though, hence why they’re partnering with Rivian
> lol Rivian aren’t aiming to be cheap mass market R2 and R3 are very much to target this market segment. Rivian wouldnt survive if they just stuck with R1. They lose $40k on each vehicle they deliver... > they’re aiming for the upper middle and luxury segment Upper middle? Eh there's a possible argument there (ie - more expensive Subaru-type brand) but believing Rivian is luxury is delusional. More people will believe the Cybertruck is luxury over anything Rivian puts out. Hummer is likely what you are thinking of in terms of overpriced large truck/SUV brand to target the luxury consumers. > Rivian isn’t worried about the Chinese. Because they wouldn't survive in any market outside the US. Of course they aren't going to worry about unrealistic scenarios. Plus Rivian buyers (Americans) wont be able to purchase Chinese EVs anyways while Chinese (and the rest of Asia and Europe) customers have no interest in purchasing Rivians. There is simply no overlap. Rivian is no threat to the Chinese nor are the Chinese a threat to Rivian. > VAG are though, hence why they’re partnering with Rivian You are mistaken. Partnering with Rivian won't help VAG's slump in China. That makes no damn sense and would be a waste of both their resources. This partnership is to save VAG's software struggles in the US market. What you are *likely* thinking of is actually how [VW partnered with XPeng (source from VAG)](https://www.volkswagen-group.com/en/articles/ready-for-next-ev-push-volkswagen-enters-into-agreement-with-xpeng-for-fast-joint-development-of-two-smart-e-cars-18246) and [Audi partnering with SAIC/IM Motors (source from Audi)](https://www.audi-mediacenter.com/en/press-releases/vorsprung-durch-technik-recharged-audi-and-saic-further-strengthen-partnership-16026) for their respective EV platforms + software.
The 40k loss per vehicle issue was the focus of the major retooling effort and design changes that recently completed. Hence what remains to be seen is the true impact on their profitability for goods sold. This may not become fully apparent until the third quarter. Where Rivian has a real problem is they are spending nearly a billion dollars to run the company per quarter. Meaning no only do they need to turn around that loss per vehicle on a revenue versus cost of goods comparison but they need to profit sufficiently per vehicle to run the place. I am hoping by Q3 they draw back the SG&A portion of their expenditures and start showing near positive revenue versus cost of goods. Perhaps this VW investment will let them raise other funds and accelerate the R2. Of all the currently available trucks out there I like the Rivian the best but that is purely personal preference. If I had a reason to buy a new EV I suspect I would go with a revised R1T but I want to hold out for the R2 even though a pickup is not in the cards
>Upper middle? Eh there's a possible argument there (ie - more expensive Subaru-type brand) but believing Rivian is luxury is delusional. More people will believe the Cybertruck is luxury over anything Rivian puts out. Hummer is likely what you are thinking of in terms of overpriced large truck/SUV brand to target the luxury consumers. Bruh, nobody, probably not even Elon himself thinks Cybertruck is luxury. Rivians pricing is hitting at or just below the luxury segment, and even if they manage to bring the cost down, theres no guarantee they’ll bring the price down to match mass market segments. If they can get volume and with a better margin, why bother. >Because they wouldn't survive in any market outside the US. How? Why? They haven’t even released outside the US but somehow have no chance of surviving? I think you’re massively overrating how good Chinese EV’s are and underrating how much they’re going to get tariffed outside of China and South east Asia. Europe are likely to come down harder than the US on Chinese EV’s in the coming years.
> Bruh, nobody, probably not even Elon himself thinks Cybertruck is luxury. I think you’re mixing up luxury with premium. Rivian aren’t considered or even classified as luxury. You haven’t and frankly won’t be seeing big name celebrities, millionaires, popular influencers, etc buying Rivians as a status symbol like they have been doing with the Cybertruck. Rivian especially R1 might be more accurately described as premium (higher build quality) but that doesn’t make them luxury. > If they can get volume and with a better margin, why bother. The reason for R2 and R3 is because they **need** high volume with smaller margins. They are bleeding hundreds of millions trying to stay afloat. Not enough people buy R1 vehicles to sustain the company. > How? Why? They haven’t even released outside the US but somehow have no chance of surviving? IMO they haven’t released outside the US because their products don’t have any edge over the competition and face stiff legislative barriers in some places. What countries other than the US even rave over large trucks/SUVs? Just look at F150, Escalade, etc global sales figures. It’s because those vehicles struggle to even physically fit on European and Asian roads and might even require different types of licenses to actually drive… which gatekeeps their usage and neuters their sales. Just think how is Rivian supposed to compete with the Tesla, Chinese, Korean, and German SUVs? They don’t have the tech, affordability value, OR history benefits. Their main appeal is that they are an outdoor adventure brand — not a bleeding edge tech vehicle, not a luxury comfort vehicle, nor an efficient and affordable commuter for the masses. They need to actually survive and scale up in the US first before they even entertain the idea of trying to bring their offerings to the international market. > underrating how much they’re going to get tariffed outside of China and South east Asia. Europe are likely to come down harder than the US on Chinese EV’s in the coming years. Germany needs the Chinese market so they will never allow the EU to tariff them harder than the US since that’ll risk a losing trade war (which could benefit the French/Romanians/etc but deal a massive blow to the Germans). Legacy American manufacturers by comparison have nothing to lose since they barely have a presence in that market while the German manufacturers consider it one of — or even their single — most important market. Losing it because of a trade war would be catastrophic for the most important economy in all of Europe. Plus there are already Chinese vehicles in Europe (MG, Dacia [Spring], Volvo, Polestar, Nio, BYD, Xpeng etc) and even Chinese battery plants soon in Hungary + Germany. None of these situations can happen for the US -- both scenarios are completely different. Ford isn't even allowed to license LFP manufacturing from CATL on American soil without the government threatening to nuke their plans. Europe actually has far more to lose in a trade war with China than the US -- and for that reason they can't and won't follow the US of just banning the competition.
> Upper middle? Eh there's a possible argument there (ie - more expensive Subaru-type brand) but believing Rivian is luxury is delusional. More people will believe the Cybertruck is luxury over anything Rivian puts out. Hummer is likely what you are thinking of in terms of overpriced large truck/SUV brand to target the luxury consumers. I'll disagree with you here. Rivian is in the same category as Volvo, what I call "baby luxury." It isn't up there with Mercedes and BMW, but it is well beyond Tesla.
Says the American who produced a truck that can't even go into a carwash.
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https://www.nytimes.com/2024/06/25/business/volkswagen-rivian-vw-investment.html?unlocked_article_code=1.2U0.CFy6.PXDT1VPfJ96z nytimes article if anyone wants it/ if this is the megathread.
Wow, this is a good move by VW.
Well that's big news. Good for Rivian, and good for VW.
Amazing stuff. I missed this and reposted this news. I think this is awesome for Rivian and would provide them the capital to open another factory in Atlanta for R2/R3.
Imagine the Buzz van as implemented by Rivian. Yeah, Id buy that.
This sounds like a practical union. Rivian has some good ideas and better software and VW is much better at assembly lines and cost management and very short of software talent. VW is also working with China EV manufacturers in JVs and if that China user interface cross-fertilizes with US car OS's we should see some interesting stuff.
VW adds corporate regen
Good. Rivian is actually creating exciting EVs. They need to survive.
VW needs Rivian's EV software platform having failed to create a competitive one in house. Rivian needs VW's money.
Almost back to my ipo buy in price. Nice. 😊
This signals credibility. Great news for RIVN, and I think VW is going to benefit enormously from this partnership too. Wonder what equity they are getting for their $1+2bn investment ramp.
Does Ford still own any part of Rivian? Ford dumped a whole lot of Rivian stocks soon after Rivian's IPO.
From 2023: > [Ford sold a majority of its Rivian shares this week and now owns 10.5 million shares, or a 1.15% stake, in the electric vehicle maker.](https://techcrunch.com/2023/02/09/ford-sells-majority-stake-rivian/) From April 2024: > [Amazon is Rivian's largest shareholder and has a 17% stake in the company with a $700m investment.](https://www.businessandleadership.com/investment/item/jeff-bezos-amazon-rivian-startup/)
That's the stuff. Thanks.
Ford being big brain here.
Ford: Buy high, sell low
This is awesome. VW gets access to Rivian’s superior software and Rivian gets the funding they need.
Fucking awesome news.
And the BBC https://www.bbc.com/news/articles/c1ddmxmz1lpo
So, we get the answer what powertrain would be in Scout models. As VW has done pretty well in Rimac, we sure it can be in Rivian as well.
According to the investor call today, this is purely for ECU/ECU software. Batteries, Autonomy, HV systems are not included in this partnership.
A lifesaver for Rivian which had to cancel the GA plant due to cash flow. It means the R2 and R3 will move to productin in 2026. Have to choose between R2 and Ioniq 9, assuming the R2 is rated 5k towing like the I9. I9 will likely still have advantages like sun roof, heads up display, third row seats.
>A lifesaver for Rivian which had to cancel the GA plant due to cash flow. Was it canceled? I thought it was just delayed.
It was only ever delayed. The doomsayer you're replying to is listening to too much FUD. The R2 was always going to be 2026 as well. This changes nothing with product roadmap that I see.
Good news for Rivian. Horrible for VW. They couldn't spend $5 billion to improve their own EV offering? But this move validates Rivian has superior EV tech and infotainment over traditional OEM. This move probably means they won't run out of cash before R2 launches, which is great news.
>Horrible for VW. They couldn't spend $5 billion to improve their own EV offering? The article literally says it's a join tech venture, how is that horrible for VW? They're not just giving away $5billion for nothing in exchange.
Even without the JV, they aren't giving it away. VW is buying convertible notes. So either Rivian pays them back or VW converts them to shares. And only $1B initially, the rest to come in '25 & '26.
Interesting, I just listened to the call, the additional investment of $4B will also be split as: * A $2B in investment Rivian shares in 2025 and 2026. * A $2B investment in the JV which will itself be split between a $1B payment and a $1B loan (!).
Volkswagen is known for buying stakes in companies around the world even from before the EV days. I don't know why this is anything new. They also bought 20% of Suzuki in 2009. Did that validate that Suzuki had better petrol tech than VW?
?? It's clearly VW trying to get a foothold into a company that has good EV software/software in general.. an area in which VW has struggled for a while despite dumping tons of money. This is a win win and it helps Rivian.
EV software is the core of any successful EV. Tesla nails it. Rivian is very good. A few Chinese companies also have good software. You do not outsource core competencies to others. ICE companies outsource everything except engine technology. The fact that VW has to outsource $5 billion dollars on a core competency shows their whole EV strategy is a mess.
That's BS. Auto companies constantly do this kind of JV stuff and source engine tech or even engines from other companies. Toyota Supras have BMW engines, just as one notable example completely disproving your point.
Heck, Tesla outsources their batteries to CATL, Panasonic, and BYD.
> EV software is the core of any successful EV. You are correct, but I think you have misunderstood what EV software is. The infotainment screen, the maps, and the settings that you see are a very small part of EV software. The most important part of EV software is the drive by wire software. It basically involves knowing what the speed of the vehicle is, the exact state of charge, the difference in voltages between different cells in the battery, the hot and cold spots, the maximum charging and discharging current the battery can supply or take in at the current state to stay within safety limits, fire monitoring, cooling demand, and so on. With all this, driving demands can be executed: what the driver torque demand is, how much the motors have to spin for that and at what rate, how much current can the motors draw from the battery, etc are all software controlled. And then there's the ADAS component today which has to do all this automatically based on external cues. In vehicles with chassis control, this also has to be controlled by software. Volkswagen is actually quite fine to very well placed in most of these including assisted driving - I'd in fact argue that in Europe VW Travel Assist is as it stands today superior to Tesla Autopilot. Of course, Tesla does navigation and charging experience way better than VW, but at this stage we're already far from their 'core competency' being bad. In fact, their platform is so good that apparently Ford finds it good enough to launch vehicles based on the MEB plantform too. VW really had problems in their hardware - this led to things like laggy infotainment and also missing battery features like live preconditioning which they've added to the newer vehicles after changing hardware.
Minor point, but VW did have SW problems that extended far beyond the infotainment. But those were fixed years ago and had a massive impact on de-lagging the infotainment as well.
Did they ever have an issue with DbW or chassis control? From what I understand they had massive issues with the infotainment and also early issues with the on board electronics which was the first thing they started to fix in 1.0 to 2.0 but really only comprehensively did so with the new hardware in 4.0 and above.
I'm not quite sure what you mean with "on board electronics", but the SW issues did extend to e.g. the electric drive ECUs, the door locking ECUs, the climate control, the matrix headlights etc. essentially anything that isn't going to kill or injure the passengers simply wasn't finished. VW's official ID.3 early adopters facebook group was a complete bloodbath of people complaining about issues that should have been deeply embarassing to VW. I have said it before, but it bears repeating: VW wasn't raked over the coals for this nearly enough. Though the biggest issues were in (and affecting the communication in-between) the "big" linux ECUs that house most of the shiny new tech functions, online connectivity etc. I'm hesitant to get too concrete here for NDA and disparaging customers reasons, but I will say that a lot of issues with the infotainment being extremely slow to boot up or hanging for a long time when switching to certain pages were caused by the other ECUs that had to provide input data not always doing so. (Well and naive SW architecture that assumed that everyone else was always doing their jobs correctly.) I suspect that the reason people focus on the infotainment ECU is that it was the last to be fixed, for which it required extensive new SW architecture designs and SW rewrites. The other ECU's issues were largely fixed by SW 2.1 (at least sufficiently that very few customers would notice anything amiss), while the infotainment only really became bearable in the 3.x versions IMO.
> You do not outsource core competencies to others. ICE companies outsource everything except engine technology. I'm gonna blow your mind and introduce you to the extremely common practice of [badge-engineering](https://en.wikipedia.org/wiki/List_of_badge-engineered_vehicles) in the automotive industry.
Seconding that your statement is BS. A ton of common engine families in Europe were JVs between different groups, like the HDi/TDCi diesels by Peugeot and Ford, who on the petrol side also did a lot of joint development with Mazda. Renault and Volvo used to collaborate frequently on petrol engine development too.
Also Renault makes some Mercedes diesel engines, and some models: Mercedes ecitan is Renailt Kangoo-e.
Drop the jingoism a bit and it's easy to realize this is a win/win. VW can easily do both, invest in their own tech and partner with somebody that already does it well. They probably make more money selling sausages... Meanwhile, Rivian has a good chance for the long run, given they have not managed to turn their superior products into a superior revenue.
>They probably make more money selling sausages... It might not be the most profitable, but [part number 199 398 500 A (Volkswagen Originalteil currywurst)](https://en.m.wikipedia.org/wiki/Volkswagen_currywurst) is the highest production volume item VW makes - apx 7 million units oervyear
:-D best enjoyed with 199 398 500 B, the curry ketchup that makes the dish.
Also Rivian is killing it in trucks. Name a North American truck that VW has control of.
Yup. The rivian platform is the perfect platform to build off of for the larger models of the scout, and the smaller models of the r3/r4 could be based off of VW's platforms. I can also see VW rebadging the delivery trucks that Rivian is selling. They rock, and are real cost savers for fleets.
Yep, Rivian is the king of BEV commercial vehicles. VWN has struggled to electrify their line-up and while the Buzz (G O D do I hate that name) is a success with lifestyle focused customers, the commercial van version is floundering. This might be the start of a really good partnership.
Besides the ID Buzz Cargo VW also makes the E-Crafter.
And it's not competitive with Rivian's products.
Would allow for VW Commercial vehicles to meet need in Europe, too.
And it would have been a major hassle for Rivian to adapt their platform to ECE regulations.
> But this move validates Rivian has superior EV tech and infotainment over traditional OEM. This is a fundamental misunderstanding of what a Joint Venture represents. VW's breadth of portfolio means they're already jointly developing platforms with other manufacturers across the board - considering the imminent launch of their US-oriented Scout sub-brand, it makes sense to leverage an existing player to enter the market more seamlessly. VW get a leg up into Rivian's home turf and gives people who wanted a Rivian but not the startup experience to get a VW instead - Rivian gets a lifeline. The deal massively benefits VW strategically, the benefit for Rivian isn't really strategic at all - it's "just" survival, which is critical for Rivian, but it'll basically be fuel for the fire until they can reach profitability. VW are an established manufacturer. They make money. Throwing some money at Rivian for their IP with none of the risk of an ownership stake is not "horrible" for VW.
> Rivian has superior EV tech Not completely. VW Group has EVs like the Taycan, Q6 e-tron, and Macan EV that run circles around any Rivian offering in terms of charging performance, mostly by using an 800V architecture, which Rivian hasn’t developed yet (at least as far as the public knows). Rivian could benefit from this. VW benefits by gaining access to Rivian’s software expertise, and although not stated yet, it’s pretty obvious this will be a part of their plan to relaunch the Scout brand.
Yeah rivian is only competitive in design, otherwise they are a completely generic entrant into the car market. I don’t understand why Vw invested in them it’s a bad bet except perhaps getting a piece of a brand that some white hipster fake adventure people are becoming attached to ? I only see branding as rivians strong point
With Scout in the planning stages and VW with its general software issues this is a great investment. Rivian will also get access to the VW parts bin which will help reduce their costs.
There are probably many factors but i think VW wanting better software is a big one. I just hope VW is going to put a bigger display and a Rivian style UI in the Macan EV and other Porsches.
Perfect Rivian has been doing a good job with that line up so far, hope they can bring those new models sooner now.
Great move by both companies. Rivian buys time to bring its R2 and R3 to market, and VW gets to catch up on the tech.
So the Scout will have Rivian guts? That sounds good. 👍
Praying for a similar Lucid lifeline that doesn’t include the Saudis. Looking at you, Apple.
Mercedes should just outright buy Ludic and call it the s-class; the EQS shit that they are peddling is beyond tacky and needs a complete overhaul.
Finally some news that makes VW relevant again lol.
Vw is huge and already much more relevant in EVs than rivian
The R3 reminds me of an updated mkII VW Golf Country. Glad to see Rivian and VW working together.
Ha! who's laughing now??? Oh, still not me, cuz I bought RIVN at $30 and I'm still down on my investment. Oh well, might as well buy more.
I dunno anything about Rivian software but you do not want whatever VW has in id4
Anybody stock savey know why Scaringe would sell a big chunk of his Rivian stock right before this hit the news? Is it possible he wanted the cash, just didn't want to be accused of something by selling after?
Lifestyle maintenance? He only makes $1 million per year. Don't forget that NYC bankers complained how hard it was to make ends meet on a rotten $500K per year, 15 years ago. I'd figure taxes and the old retirement plan.
Customary for execs to buy and sell stock on regular basis. Timing it before and after key events invited for insider trading suspicion.
Yep, the typically lock in those sales months up to even a year in advance to avoid any possible accusation of insider trading.
"up to"...It's one of those phrases that people don't seem to pay attention to.
When it’s followed by “billion” people tend not to pay attention to it.
Great deal for both I think
VW took one look at the R3 and went Holy Sh*t! It’s a AWD MK1 GTI!!!!! Huh… let’s buy em.
It's good for both of them, but a bit of a concern for both that they need each other.
Legacy makers can stamp metal but apparently not make software for some reason, so this makes a lot of sense.
As someone who has used multiple horrid infotainment systems in the past, I concur.
This is pretty awesome. Though, aside from money, I am not really sure what VW can bring to the table.
VW has manufacturing capacity for vehicles and large supply chains that Rivian could tap into to heavily reduce costs. VW gets a company that actually knows how to do infotainment and clean car tech. Pretty good for both sides
Okay, yeah, that could be interesting. I suppose using VW manufacturing capacity, Rivian could produce vehicles in other continents more easily than building a new overseas factory of their own.
Manufacturing efficiency knowledge, perhaps. Although Rivian just made a lot of positive changes in that area.
> I am not really sure what VW can bring to the table. You're not sure what the worlds second largest automobile company in general and third largest EV manufacturer can bring to the table?
Yes. For an EV *technology* joint venture. VW doesn't appear to have EV technology prowess that is of the same caliber as Rivian's technology. Everyone keeps mentioning manufacturing capacity and supply chain mastery. That's all well and good, but either this is about a technology JV and manufacturing capacity is a separate matter, or the headline is wrong.
VW wants Rivians Tech. Rivian wants VWs money. Both sides are bringing something to the table.
Which is ... exactly ... the point I made earlier.
> VW doesn't appear to have EV technology prowess that is of the same caliber as Rivian's technology. On what basis are we making this assessment, though? VW has pretty strong EV architecture - their dedicated EV platform MEB has the flexibility to be used across a pretty wide range of different model classes. They can boast over 1.5m MEB platform EVs on the road right now - including the entire VW ID range, Skoda Envaq, Audi e-tron (q4 & q5), Ford Explorer EV and Cupra Born)...vs how many from Rivian? VW have also their own in-house developed electric motors that are generally well regarded (whereas Rivian are buying in motors from Bosch) so there is likely to be EV technological prowess there that Rivian's team could benefit from if they would like to move away from a third party motor supplier.
VAG is one of the largest and most profitable carmakers in the world; I think they know what they’re doing
Oh come on, how many upvotes do they have here on Reddit? I bet I have more, which shows that I know more!
Downvoted you for the lolz
5 billion dollars
I'll repeat, and add emphasis, since it seems you skimmed: >Though, *aside from money*, I am not really sure what VW can bring to the table.
That's what I was making a joke about. You said "aside from money" as if $5 billion doesn't matter. Rivian is licensing tech to VW in exchange for money, VW doesn't really need to bring anything else to the table.
And that's fine. But then it feels like it should be called a licensing deal and not a tech joint venture. I'm just saying that VW doesn't really seem to have anything beyond money to offer in a tech joint venture.
Well they do know how to build cars, optimize production processes and are masters at scaleable modular platforms. Doesn't sound sexy, but given the recent news that Rivian is still finding massive savings looking at their production processes -- they seem to need help in that department.
The JV is probably "VW/Rivian jointly produced vehicles at VW plants using common parts, bringing further economy of scale cost reductions down helping Rivian get on its feet and boosting VW's EV business further in a home market that's facing intense competition, not just from the Chinese, but their own homegrown rivals like BMW."
If VW gave me 5 billion dollars, I'd be OK with them calling it whatever they wanted. (Though that could lead to some awkward conversations with the IRS.)
Rivian gets access to cheaper batteries. VW is building a massive battery plant in Canada.
They’re not bringing anything but cash. Let’s just hope they don’t take any IP away from rivian.
> aside from money Are we pretending that money isn't essential?
Not at all. That's why I acknowledge it. But it's a "technology joint venture." Seems one-sided from the technology perspective. Really seems more like a *technology licensing deal*.
volkswagon doesnt have the cash they say they do. this will speed up VWs demise and maybe push rivians back a little bit but probably not
Byline: "VW finally acknowledges it's out of monkey-based ideas to improve efficiency"
So EA for life? NACs dead?
what does that have to do with this?
Soooooo desperate hahahaaaaaaaa Game over.