Rivian, an American electric car manufacturer, has announced a partnership with Volkswagen, the German car giant. The collaboration is aimed at developing software-based electric cars that can be incorporated into both companies’ models by the end of the decade.
Under the agreement, Volkswagen will invest three billion dollars directly in the company and two billion dollars for a joint development project. Rivian’s software technology will be a key component in this process, with the goal of reducing costs per car.
Volkswagen’s own Cariad unit, responsible for software development, has faced challenges in launching new products on time. By partnering with Rivian, Volkswagen hopes to strengthen its position in the competitive electric car market and leverage its expertise in software development to accelerate the development of software-based cars.
For Rivian, this partnership is seen as a much-needed validation of its financial status. The investment will help address the company’s capital needs for growth and expand its software technology to a wider market. Following the announcement of the partnership, Rivian’s stock price surged over 30% in after-hours trading.
