Rivian's EV Innovation May Outlast Its Brands

The partnership between Rivian and Volkswagen might develop the "operating system" for the entire automotive sector, said Wassym ...

The partnership between Rivian and Volkswagen might develop the "operating system" for the entire automotive sector, said Wassym Bensaid from Rivian to journalists.

Rivian's partnership with the Volkswagen Groupisn't only focused on creating the foundational technology for future Rivians, Audis, and Porsches. The company envisions a future where it sells its electrical systems to other automotive manufacturers.

We are addressing an issue not just for Rivian and Volkswagen, but for the broader automotive sector," said Wassym Bensaid, Rivian's chief software officer and co-head of the joint venture, during a statement to reporters on Wednesday. "This could potentially evolve into an opportunity for a standardized technology platform that others can also utilize.

RV Tech's management is concentrating on the R2 and their initial Volkswagen models prior to expanding their focus.

Rivian and Volkswagen Group Technologies—referred to as RV Tech— are developing cutting-edge computing and software systems that will be utilized by both organizations. The California-based electric vehicle startup has received $5.8 billion in critical funding from VW, along with more affordable electronics due to the German company's large scale. In return, Volkswagen gains access to innovative new"zonal architectures"for all of its future electric vehicles spanning brands from Skôda to Lamborghini.

These advanced computer systems and the software that integrates all components are expected to enable more sophisticated software capabilities and improved updates. However, additional elements such as self-driving functions or user interfaces will have to be developed individually by each manufacturer.

The $5.8 billion agreement between the two companies provides Rivian with financial support and grants Volkswagen access to advanced vehicle technology.

The leaders of the joint venture believe that other manufacturers will also seek access, now that vehicles are becoming more technology-driven. Carsten Helbing, co-head of the JV from the Volkswagen side, mentioned that the automakers developed this vision during one of their initial meetings two years ago.

On one side, software plays a crucial role. However, developing software is challenging," Bensaid remarked. "The automotive industry is highly fragmented, with no clear standard and no real ecosystem that unifies efforts. This is where there's a significant opportunity for our partnership.

Certainly, although the entire automotive industry has focused on smooth and highly integrated"smartphones on wheels"for many years, numerous of these attempts have beenfraughtand tedious. (Even Rivian and Tesla have faced their share of software issues.)

Bensaid mentioned that RV Tech might one day serve as the "reference operating system for the entire automotive sector," allowing car companies to design their vehicles and digital interfaces around it. Similar to how Google provides Android to numerous smartphone makers, he explained, RV Tech could offer the underlying computing and software infrastructure for electric vehicles through licensing.

Why reveal that competitive advantage to competitors? It's straightforward: Marketing technology is a significantly more profitable business than manufacturing vehicles.

He mentioned that licensing technology is "a completely different challenge with a distinct profit structure, from a business perspective, compared to manufacturing cars." Rivian has not yet achieved profitability, and producing vehicles is a low-margin endeavor even for the most efficient and well-established companies. Another electric vehicle startup, Lucid Motors, is also looking into the supplier market, aiming tolease its highly effective powertrainsto other firms, beginning with Aston Martin.

• The New Mercedes GLB Electric Vehicle Features More Displays Than a Typical Living Room
• Certain Plug-In Hybrid Batteries Deteriorate at a Much Slower Rate Compared to Others

For the time being, RV Tech is concentrating on carrying out theR2, Rivian's $45,000 affordable crossover set to launch next year, alongside the initial VW Group versions. These consist of a compact VW hatchback, an Audi, and vehicles from Scout Motors. However, it is also looking ahead, maintaining a "link" with other manufacturers and ensuring that its current developments can be modified for vehicles from other companies.

"Essentially, we're establishing the architectural groundwork for a solution that is simple to customize and easy to scale, ensuring it's prepared once we have the capacity to focus on those third-party OEM possibilities," Bensaid explained, referring to original equipment manufacturers, which is industry jargon for carmakers.

Rivals are not standing idle, and several are progressing with their own more sophisticated computing systems. They might choose to maintain control internally, provided they can manage it. After all, this kind of vertical integration is what initially provided Rivian with an advantage.

But witnessing VWs powered by Rivian on the roads might alter their opinions. The initial VW Group vehicle to demonstrate the outcomes of the joint venture will be the production model based on theID.Every1 concept, set to debut in 2027 at a price of 20,000 euros.

Contact the author: Tim.Levin@InsideEVs.com

Updated on Thursday, November 13 at 11 a.m. ET with further input from Rivian's software head Wassym Bensaid and Carsten Helbing, co-head of RV Tech.