While confirm the closure of the Audi factory in Brussels and there is talk of closing up to three factories in Germany, the Group Volkswagen will invest a total of 5.8 billion dollars at the American manufacturer of Rivian electric cars. The joint venture will focus on the development of a new electrical architecture and of a svehicle software for future models, with the first model resulting from the alliance scheduled for 2027.
Investing in Rivian is for Volkswagen the desperate solution to reverse the fiasco that is its insistence on developing its own software for its electric cars via its company Cariad. The same one that had to update thousands of Volkswagen ID.3s by hand, one by one, before being delivered to their first buyers. For Rivian, a company that spends more than 1 billion dollars every quarter to manufacture less than 5,000 cars per monththe arrival of Volkswagen is salvation.
When hunger and the desire to eat come together
The new joint venture, called simply “Rivian and Volkswagen Group Technology, LLC,” will be led by Rivian software chief Wassym Bensaid and Volkswagen Group chief technology engineer Carsten Helbing. The teams will be initially based in Palo Alto, California, with three additional locations in North America and Europe being developed.
But at a time when the Volkswagen Group wants to save several factories in Europe, essentially in Belgium and Germany, in order to save 11 billion euros between now and 2026, invest billions in a electric car brand that won’t start It doesn’t seem like the smartest move. Initially it was going to be 5,000 millionbut now Volkswagen has upped the ante. However, it could be a perfect solution to the woes of the two manufacturers.
Volkswagen, like most automakers, realized a few years ago that what Tesla What he was doing was shifting the appeal of cars from their performance, comfort or style to everything they could do thanks to software. It simply made a huge screen and four tricks that feel like the car is driving itself more attractive than a car that corners with aplomb, is fun to drive, or is just super comfortable irrelevant.
Volkswagen, like everyone else, also had to propose at least the same if not more, it is what is called the software defined car. Volkswagen chose to develop its own software for this via a company created specifically, Cariad.
The result has been disastrous. Delays accumulated in the launch of several models, such as the new Porsche Macan, and it has become a pit that swallows funds. Others, like Volvo, Polestar or Renault, chose to leave that part to whoever knows about software, Google in this case, and not burn money as if there were no tomorrow.
The deal with Rivian can be seen as a capitulation. It is the recognition that Volkswagen is not capable of designing a solution to most of its problems on its own. Partnering with Rivian is not as risky as investing in a nascent start-up, because it has produced and put on the market a product that is liked.
Rivian dominates the software-defined car thing, or at least compared to Volkswagen. And in the end, it is very likely that what will come out of this company will be, simply put, the Rivian software applied to Volkswagen group cars. In fact, for the company’s launch, the engineering team had an electric Volkswagen ready with Rivian software developed in just 12 weeks.
For Rivian, however, the arrival of Volkswagen is the promise of having a future. The company posted an operating loss of $108,000 per car sold at the end of the third quarter of 2024, in addition to about $8 billion in debt and payment obligations.
This means that if Volkswagen wants to finally have its software, it will have to ensure the survival of Rivian. In that case, you will have to continue injecting money or take over the company. Of course, for the Volkswagen Group, it may not be the best time to add a new brand to its portfolio.
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Source: www.motorpasion.com
