Rivian (RIVN) and Volkswagen receive German approval to form joint venture

Rivian (RIVN) and Volkswagen have received the green light from German authorities to form a new joint venture. Without worrying about “any competition issues in the series,” the German Federal Cartel Office approved the Rivian/VW partnership on Monday.

Rivian and Volkswagen gain German approval

It’s been more than a month since Rivian and VW announced their groundbreaking alliance. The new partnership will leverage Rivian’s software expertise to develop the architecture for next-generation electric vehicles.

Volkswagen will invest up to $5 billion, with $3 billion going to Rivian and $2 billion to the joint venture. However, those investments are based on meeting “certain milestones.”

The partnership took a major step forward on Monday after receiving approval from German competition authorities.

The Bundeskartellamt announced that it had “approved the formation of a joint venture between Volkswagen and the American electric car manufacturer Rivian under merger control.” The office also approved VW’s investment in Rivian.

Andreas Mundt, president of the Bundeskartellamt, explained that the Rivian-Volkswagen joint venture is not expected to “significantly impede effective competition.”

In a statement released Monday, the agency added: “Automakers will continue to have a sufficient number of services available to them to enable E/E architectures..”

Electrek’s Opinion

The new Rivian-Volkswagen JV is expected to be finalized by the end of the year. The approval of the German antitrust authority suggests the partnership is still going strong.

The news comes as Rivian looks to ramp up production following the planned closure of its Normal, Ill., plant, which kept deliveries flat (13,790) in the second quarter. Rivian expects production to ramp up in the second half of 2024.

U.S. sales of Volkswagen’s only electric car, the ID.4, are down 15%. VW has struggled to gain traction as the market shifts to electric vehicles, with software issues hampering progress.

Software issues have delayed key electric vehicles like the Porsche Macan. New reports suggest VW is delaying more electric vehicles, including the ID.4 successor, due to ongoing software snags.

VW’s next-generation SSP platform, which is expected to use software from a partnership with Rivian, isn’t expected until 2029. That’s another 15 months from the original plans.

Rivian CEO RJ Scaringe said the VW joint venture is different from other partnerships with Ford and Mercedes because it focuses “on exactly what has always been a challenge.”

Volkswagen is hoping Rivian will help fix the software issues. What do you think? Will working with Rivian help VW overcome its software hurdles? Let us know what you think.