Chief Executive Officer/ Board Director. Porsche, Jaguar Land Rover experience. Strategic Board Advisor/ Investor.
Who would have thought - VW and Rivian. A smart move? 👏 I think so. But it’s not without risk. So I am curious for your view in the comments. 🖥️ One of VW’s Achilles’ heel is software, as any ID driver can confirm. Also, the lack of infotainment features and integration is a sales barrier, especially in China. So cooperating with the best in the field, like Rivian or XPENG, can only make software better and cheaper. 🤝 It is also a further sign, that cultural change at Volkswagen Group is really happening. The seismic transformation needed in the Automotive industry can not all be done in-house. Look at CARIAD. Oliver Blume shows the group how through partnering, flexibility, and regional focus, you can make things happen. Cost-/ time-/ quality-to-market are improved. A little example, if only in a tiny niche of the market? Investing in Rimac Automobili to then not swallow them up in a giant organisation, but actually handing them the crown jewel brand BUGATTI. Just 2 years later they presented the first result, the amazing Bugatti Tourbillon. True to the brand, yet Rimac-innovative. 🔋 Besides software, the deal gives VW access to Rivian’s impressive EV-tech. This is not just a potential basis for future Scout Motors Inc. product. It also keeps VW at the forefront of EV tech, while with their legacy brands carefully balancing the transition from ICE via PHEV to EV as customer demand and legislation allow - market by market. 💲 For Rivian the 5bn$ deal is a new life line. In scaling up, its cash burn is huge. Which is completely normal. Tesla needed 7 years and billions of cash after launching the Model S until it turned a profit consistently. The Rivian R1s were launched not even 3 years ago. However, with main shareholder Amazon not ready to give more, and overall parsimonious investors, development of the promising new R2 and 3 models, even the going concern of Rivian were at risk. 📈 The investment is also a strong signal to the financial markets. In the ‘10s money was abundant, even the craziest, improbable start-up ideas supported. Now all fantasy seems gone, credible innovators like Arrival or Volta Trucks are cash deprived. Perhaps VW’s move encourages investors to be bolder again. 🌐 Using VW’s tight-knit global distribution network will also help Rivian to expedite internationalisation. And they might learn a thing or two from the big incumbent about tight cost management. Urgently needed at the start-up. So, yes, this is a smart deal. Fingers crossed, that David and Goliath can make it work, together. #startups #management #ev #automotive #cooperation #partnering
❗ We are planning a joint venture with Rivian, a California-based manufacturer of all-electric pick-up trucks and SUVs. The shared goal will be, to create next generation software architectures, to be used in both companies’ future electric vehicles. Check out the facts: 🔹 Initially, we will invest $1 billion in Rivian. A planned, additional investment will be up to $4 billion. 🔹 The joint venture is expected to create best-in-class, software-defined, vehicle technology. Oliver Blume, CEO of Volkswagen Group: “Through our cooperation, we will bring the best solutions to our vehicles faster and at lower cost. We are also acting in the best interest of our strong brands, which will inspire with their iconic products. The partnership fits seamlessly with our existing software strategy, our products, and partnerships." The partnership is anticipated to accelerate the development of software for Volkswagen Group and Rivian. ❓ What do you think?
Lukas Beech 🔍
5mo
Indeed. Again some big number; $1B + 4 more in the pipeline. Just think of the impact on hiring and Leadership Talent needs...
Maik Jungrichter
3mo
Felix Bräutigam Sounds like an exciting move! Accelerating the development of cutting-edge software for EVs with such a partnership is definitely a game-changer. The investment in Rivian shows commitment to innovation and sustainability in the automotive industry. Collaboration like this could set new benchmarks for what’s possible in the future of electric vehicles. Can’t wait to see what comes out of this joint venture! 🚀 What do you think, is this the right move for Volkswagen and Rivian?
Steve Young
5mo
Felix, my reaction is that the situation at Cariad must be pretty awful to drive the need for these partnerships with XPeng and now Rivian, but surely it will lead to a 'Tower of Babel' on wheels with three operating systems across the product range plus legacy? Steve
Chief Executive Officer/ Board Director. Porsche, Jaguar Land Rover experience. Strategic Board Advisor/ Investor.
5moCertainly an integration challenge, Steve. But better late, than never I guess. And it can lead to the multi-level, flexible software structure essential to tackle the various ACES challenges.