megapanalo Volkswagen and Rivian Form Joint Venture, Deepening Alliance
Volkswagen, the German automaker, and Rivian, a California-based maker of electric pickups and S.U.V.s, said on Tuesday that they would form a joint venture to develop software and electronics, extending a partnership they announced in June.
Volkswagen said it would increase its investment with Rivian to $5.8 billion from $5 billion, which will include a 50 percent stake in the joint venture. While short of an acquisition, the new company broadens the alliance with Rivian and could foreshadow similar partnerships between other established carmakers and new companies struggling to become profitable.
“The partnership with Rivian is the next logical step in our software strategy,” Oliver Blume, the chief executive of Volkswagen, said in a statement.
In June, Volkswagen and Rivian had said they would work together on vehicle software — an area where the German carmaker has struggled. The agreement announced Tuesday goes further by creating an independent company to jointly develop technology for electric vehicles.
The ever-closer association with Volkswagen has helped allay fears that Rivian will run out of money before it becomes profitable. Rivian shares rose 6 percent in extended trading on Tuesday.
Initially the partnership will be focused on developing software for electric vehicles, but could be expanded to include battery modules or other technology, Mr. Blume said during a conference call with reporters. Volkswagen will use the technology in many types of vehicles including subcompacts and cars made by its Audi and Porsche divisions, he said.
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