For a while now, the automotive headlines have been filled with news of mergers and collaborations. For example, Nissan and Honda have been in the news for a possible merger. Toyota and Mazda have also been in the news for a proposed collaboration for a new shared sports car. As for Volkswagen and Rivian, they have been working in tandem since last year. We covered news of Volkswagen’s $5 billion investment in Rivian just in June last year. However, the German automaker’s motivations were not as clear then.
Volkwagen has now come forward to reveal why it is investing such a huge sum in Rivian. The former company needs no introduction as they are the second leading manufacturer of cars worldwide, only behind Toyota. As for the latter, Rivian is an American electric vehicle manufacturer, founded in 2009. They specialise in producing SUVs and trucks mainly for off road purposes.
What does the Volkswagen-Rivian Joint Venture Entail?
Volkswagen has revealed that it is pumping 5.8 billion dollars (approximately 870 trillion naira) into Rivian because of their e-hardware system. The two companies have agreed to a joint venture in which Rivian will work with Volkswagen to create ‘next-generation electrical architecture and best-in class software technology’. This joint venture is going to be a symbiotic one as both parties will get to enjoy some benefits. When asked about the partnership by Top Gear, Volkswagen’s brand boss, Thomas Schäfer revealed that ‘the body systems, the drivetrains, the infotainment’ as well as ‘all electronics in the vehicle’ would be passed from Rivian to Volkswagen. Porsche and Audi, which are both Volkswagen subsidiaries will most likely be first in line to benefit from the shared technology.
Volkswagen has prided itself in the production of Internal Combustion Engines, especially diesel engines over the years. As a result, the transition into an electric future would not have been so smooth. But with Rivian coming into the picture, they are simply passing on the electric technology developed over the years to Volkswagen. On the other hand, Rivian, which is only a few years old, is getting a fat cheque from Volkswagen to further finance their own operations. So you can see that there are no losers in this joint venture.
Overall, things are looking great for both Rivian and Volkswagen. It is only a matter of time before we have fully electric volkswagen vehicles coming out of the factory. Until then, we can only anticipate the outcome of this joint venture. What other car companies do you predict will pair up for such joint ventures in the near future? Let’s discuss in the comments!
