Rivian will no longer end up like Fisker: The Volkswagen Group will invest $5 billion in the electric SUV and truck manufacturer Rivian, including $1 billion now. This will be done by establishing a joint venture for the development of software and software-based platforms.
Seven years after Fisker, which targeted the same market, filed for bankruptcy, this is a significant financial backing for Rivian, which was founded in 2009, sold about 57,000 vehicles in 2023, but lost $5.4 billion. In addition to the expensive R1 models (over $70,000), Rivian will launch two significantly cheaper models (around $40,000), the R2 and R3 crossovers, in 2026.
However, Volkswagen itself is set to enter exactly the same market with the Scout it is reviving, an iconic American off-road vehicle that will be launched as an electric vehicle with a starting price of around $40,000. The Germans are already building a new factory for it in South Carolina, which will employ 4,000 people and have a production capacity of 250,000 vehicles per year. The project involves an investment of $2 billion, and production is set to begin in 2026.
The difficulty of bearing the costs of software development was one of the main reasons that led to Rivian's collapse, which delivered vehicles to customers without active safety systems whose software was not yet complete. The collaboration will reduce costs for both companies and reflects Volkswagen's confidence in the continued growth of the electric vehicle market, which has shown weakness in the past year.
Oliver Blume, CEO of the Volkswagen Group, said, "Our customers will benefit from the focused partnership with Rivian to create a leading technology architecture. Through our cooperation, we will bring the best solutions to our vehicles faster and at a lower cost. We are also working for the benefit of our strong brands, which will inspire with their iconic products. The partnership fits seamlessly with our existing software strategy, products, and partnerships. We are strengthening our technological profile and our competitiveness."
RJ Scaringe, founder and CEO of Rivian, said, "Since Rivian's early days, we have focused on developing highly distinctive technology, and it is exciting that one of the largest and most respected car companies in the world has recognized it. The partnership is expected to bring our software and related regional architecture to a wider market through the Volkswagen Group and also provide us with the necessary capital for continued growth."