Volkswagen’s Bold Move: Invests $5B in Rivian for Future EV Collaboration and Scout EV Brand Advancement

Volkswagen Group is set to acquire a stake worth $5 billion in Rivian, setting the stage for joint ventures in electric vehicle development, as declared by both car manufacturers on Tuesday.

Volkswagen is set to inject an initial sum of $1 billion into Rivian via a convertible note that is not backed by collateral, subject to the green light from regulatory bodies and fulfillment of other requirements, as stated in a press announcement from Rivian. Subsequent funding could reach $4 billion, bringing Volkswagen's total investment to $5 billion.

Volkswagen and Rivian have announced a partnership focused on developing advanced electric infrastructure and top-tier software solutions, according to the statement. The collaboration will leverage Rivian's expertise in software and zonal electronics as the foundation for the new venture they plan to introduce by year's end. The two car manufacturers intend to roll out new models born from this partnership during the latter part of the 2020s.

Ceremony marking the start of

Volkswagen plans to implement Rivian's current electrical system and software infrastructure initially. While a detailed schedule was not provided, the announcement mentioned that considerable progress has been made in recent months to ensure Rivian's electrical framework and software can be integrated with Volkswagen's vehicles.

The pair of car manufacturers did not detail which Volkswagen models could incorporate technology from Rivian. However, it's clear that potential beneficiaries could be the vehicles under Volkswagen's upcoming Scout electric vehicle line, which is expected to produce electric off-road vehicles in a newly established $2 billion facility in South Carolina. Drawing on the historic appeal of International Harvester trucks that were produced between 1960 and 1980, Scout is set to offer a series of electric pickup trucks and SUVs built on a fresh, exclusively electric chassis.

Rivian's Second Model

Scout has disclosed minimal details about its cars and underlying system. A report from November indicated that VW might opt for collaboration with Austria-based Magna instead of deploying its in-house engineering and development capabilities.

Green Car Reports made contact with Scout, but their representative chose not to respond.

In a recent interview from 2023, Scott Keogh, the chief executive of Scout, disclosed the company's goal to set an initial price point for their vehicles around $40,000. This figure is not far off from the $45,000 entry-level cost that Rivian plans for its forthcoming R2 electric SUV, which is expected to launch in 2026. The financial backing received from Volkswagen is anticipated to aid in the successful release of Scout's model.

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