According to foreign media reports, on June 25, the Volkswagen Group announced plans to establish a joint venture with the new energy vehicle startup Rivian Automotive and invest up to 5 billion US dollars (approximately 36.355 billion yuan) in Rivian by 2026. The investment will be equally controlled and owned by the joint venture.

The joint venture will jointly create the electrical/electronic architecture for the next generation of electric vehicles. Volkswagen Group stated that it will immediately invest 1 billion US dollars in Rivian initially, with an additional 4 billion US dollars to follow in the future.

Who is Rivian?

According to information, Rivian Automotive is an American electric vehicle company that has launched two products: the electric pickup truck Rivian R1T and the electric SUV Rivian R1S. It is considered a strong competitor to Tesla. Rivian is the first company in the world to mass-produce electric pickup trucks and start batch deliveries.

However, from a market performance perspective, Rivian and Tesla are not in the same league. Rivian sold nearly 60,000 vehicles last year and is still "spinning" in the US market, far behind Tesla's global annual sales of 1.8 million vehicles.

Moreover, Rivian's performance has been disappointing. Due to slowing demand for electric vehicles, Rivian announced layoffs of 10% in the fourth quarter of last year, with a net loss of 1.52 billion US dollars during the reporting period. At that time, Elon Musk, CEO of rival Tesla, asserted, "Based on current trends, Rivian will go bankrupt within half a year. Maybe there will be variables in this downturn, but there is no hope now."

Some institutions predict that Rivian still needs 7 billion US dollars in financing to support itself due to the deterioration of cash flow and the capital investment in the production of its R2 parity model platform in 2026.

Unexpectedly, the "savior" Volkswagen Group has arrived, and Rivian has "come back to life." As a result of securing Volkswagen Group's investment, Rivian's US stock price rose to 11.96 US dollars, an increase of 8.63%.

Taking a "shortcut" to seize the US electric vehicle market

Volkswagen Group's intention in investing in Rivian is actually quite obvious. By procuring the other party's electric vehicle technology and applying it to its own products, it can shorten the time to enter the US electric vehicle market.

Although Rivian's overall scale is not as large as Tesla, its electric pickup trucks are highly favored by American consumers, with executives from Ford, Amazon CEO Jeff Bezos, and others personally promoting them. In addition, Rivian's software development team is also quite strong.

It is reported that Rivian's software will be used in Volkswagen's off-road electric vehicle brand Scout. Volkswagen is building a factory in South Carolina to assemble pickup trucks and SUVs that compete with Rivian. The factory is scheduled to go into production by the end of 2026. Analysts said that Volkswagen does not have an advantage in the large SUV and pickup truck segments in the US, and its cross-border electric SUV ID.4 has also failed to make a breakthrough. However, the partnership with Rivian has opened a window for it.

A familiar playbook

Does Volkswagen's investment in Rivian seem familiar? In fact, this is how it operates in the Chinese market!

Although Volkswagen Group has invested heavily in both intelligent and electric vehicles, the results have been minimal, and the input-output ratio is severely imbalanced. After forcing Herbert Diess to step down, Volkswagen Group has basically temporarily abandoned the route of independent research and development in intelligence and electrification, instead opting for the route of investment or shareholding in technology procurement.

The Chinese market is the testing ground for Volkswagen Group to launch this strategy. In terms of electric vehicle transformation, it has invested in XPeng Motors and cooperated in the development of EEA electronic and electrical architecture technology; Audi has purchased the IM Motors electric platform; and invested in battery company Guoxuan High-Tech. In terms of intelligence, Volkswagen's software subsidiary CARIAD China has established joint ventures with Horizon Robotics and Zhongkechuanda to deploy assisted driving and in-vehicle systems.

Obviously, Volkswagen Group, which does not want to miss the wave of intelligent electric vehicle development, has adopted the means of "buying technology with money" in major sales regions around the world to make up for its shortcomings and catch up. This is actually similar to "gambling," and it depends on whether the probability of winning is high or not.

(Image source: Volkswagen Group)