Volkswagen Group and Rivian Automotive launched their joint venture on November 13, creating a new company called “Riviano and the technology of the VW group”. The new company will focus on developing an electrical/electronic architecture and software for electric vehicles that each automaker will use.
The news, announced in a press release Tuesday, lifts the veil on one of this year’s largest auto deals, providing more details about its goals, leadership and financial structure. And with the deal finalized, Rivian now expects to receive a money order, while Volkswagen Group will have access to key technology.
Over the longer term, the total deal size is expected to reach $5.8 billion by 2027 – 16% higher than the $5 billion initially estimated by 2026 – provided certain technological milestones are achieved .
The size of the larger deal comes as the parties negotiated financial details, timing and rewards, then adjusted valuations accordingly, Claire McDonough, Rivian’s CFO, told investors on a call Tuesday.
More immediately, the electric vehicle startup will receive a $1.32 billion cash payment from Volkswagen Group in November as payment for licensing Rivian’s intellectual property and a 50% equity stake in the joint venture, according to a letter from the shareholders. The November payment adds to the $1 billion that Volkswagen Group already paid in June for a promissory note that will be converted into Rivian shares this December.
In other words: Rivian will have raised about $2.32 billion in 2024 alone as a result of the deal, with $3.5 billion more expected in the coming years.
Rivian will have access to a significant influx of financing thanks to the joint venture with the Volkswagen Group.
For Volkswagen, the investment marks an important step towards introducing a next-generation software-based EV platform into its portfolio.
While the joint venture will first focus on launching Rivian’s R2 in the first half of 2026, the resulting electrical architecture and software technology stack will also be used to launch vehicles for the Volkswagen Group as early as 2027, according to the press release.
The companies also said they have already tested the concept. Earlier this year, teams from the two companies adapted a Volkswagen Group vehicle to run on Rivian’s integrated technology platform and market zonal hardware design.
“Today’s conclusion of our joint venture with Volkswagen Group marks an important step forward in helping the world transition to electric vehicles,” Rivian CEO RJ Scaringe said in the press release. “We are excited to see our technology integrated into vehicles outside of Rivian and are excited about the future.”
The new company will be headquartered in Palo Alto, California, although three new sites are in development in North America and Europe, according to the press release. It will employ about 1,000 people, McDonough said on the investor call.
Rivian and VW Group Technology will be led by two co-CEOs, choosing one technology executive from each company: Wassym Bensaid, chief software officer of Rivian, will be co-CEO and chief technology officer, while Carsten Helbing, chief technology engineer of Volkswagen Group, will be co-CEO and COO of the joint venture.
“I am extremely impressed with the work already accomplished,” Bensaid said in the press release. “Although the demonstration vehicle only scratches the surface of what is possible, it is incredibly exciting to see what is possible when a new OEM and an old automaker work closely together.”