Volkswagen and Rivian agree to $5 billion partnership

Volkswagen and EV company Rivian have entered a new partnership, and the total price tag for the collaboration could reach an eye-popping $5 billion. The businesses are launching a joint venture to develop platforms for “software-defined vehicles.” According to the announcing the deal, the joint venture’s work will focus on Rivian’s zone-based approach to electric vehicles, which significantly reduces the complexity of the wiring and electronics. Both Rivian and Volkswagen are expected to debut vehicles using their combined forces as a result of the partnership; the release notes that each of the brands will continue operating their vehicle businesses separately.

The massive dollar figure for this collaboration is broken up into components. Volkswagen is making a baseline $1 billion investment in Rivian the EV company, followed by two more expected investments of the same amount in 2025 and 2026. The car brand also anticipates putting a total of $2 billion into the joint venture, some at the launch and some as a loan in 2026.

This work will see Volkswagen adopting Rivian’s signature zonal architecture for its own future machines. Today’s announcement follows hot on the heels of the brand into many of its car models.

Rivian has seen some financial struggles this year, leading the company to for a plant in Georgia and to of its salaried staff. A deal of this size with a leading traditional automaker should help the company to stabilize as it works towards its of electric vehicles.