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• Did VW and Rivian just have a baby?👶

• 3 Links 🔗

• Meme of the week 🤡

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Did VW and Rivian just have a baby?👶

Yes, and they named it “Next-gen. SDV Joint Venture” - how cute :)

What happened?

Here’s what went down (Link to PR):

• VW and Rivian agreed to form a Joint Venture (JV) to develop next-generation E/E and Software architectures for vehicles at both companies.

• JV will be held 50/50 and is expected to start by the end of 2024

• VW Group will invest up to $3bn in Rivian directly ($1b per year 2024-2026), upon completion of certain milestones.

• VW will contribute additional up to $2bn in equity, IP considerations and loans to the JV by 2026.

• Two Co-CEOs, one from each company, will lead the JV. The Rivian appointee will also hold CTO title, while the VW appointee will also hold COO title.

Here’s how all that will look:

Why?

It looks like VW CEO Oliver Blume and his team have taken a real liking to Rivian’s IP and capabilities in the areas of electronic vehicle architecture and software.

What might have helped in building the relationship is that Kjell Gruner, President Business Growth @ Rivian, spent over 20 years working at Porsche together with Oliver Blume.

On the surface, the deal looks similar to VW’s partnership with EV startup Xpeng in China. That deal is expected to bring two VW-branded vehicles based on a jointly developed E/E architecture to market in China as soon as 2026. The so-called “CEA” architecture is a joint development of XPENG, Volkswagen China Technology Company and CARIAD China.

But while that collaboration is limited to China, the VW deal with Rivian does not seem to have region restrictions attached. VW stated that the deal will bring the JV’s E/E solutions not just to the Rivian-like upcoming Scout brand but also to a wide range of VW Group vehicles.

So what?

On the surface, the deal seems rather surprising.

On the one hand, there’s Rivian which hasn’t had the most straightforward track record on partnering with legacy automakers. Back in 2019 Ford invested $500m into Rivian and made plans to use the company’s technology for an upcoming Lincoln-branded electric SUV. But just one year later, those plans were canceled and in 2023 Ford sold most of its remaining stake in Rivian. Today, in 2024, there is still no electric vehicle available from Ford’s premium brand Lincoln.

Separately, Rivian made plans for a joint venture with Mercedes-Benz to build electric vans for Europe back in 2022. But Rivian backed out of those plans just three months after the announcement.

On the other hand, it’s surprising to see that an Automotive giant like Volkswagen Group, the world’s largest automaker by revenue in 2023, would need access to technology from a startup like Rivian.

To put things into perspective: VW Group employs >670,000 people worldwide. Its shared Software division CARIAD, which was originally tasked with developing next-generation shared vehicle architectures, alone employs >6,000 people.

Rivian itself employs just around 16,700 people across the whole company. It remains to be seen how many folks Rivian and VW Group will transfer into the yet-to-be-formed joint entity.

What’s next?

For Rivian, the path forward seems clear: The recently-refreshed R1S and R1T vehicles already use it’s new and updated “zonal ECU” E/E architecture. The same architecture will be re-used for the upcoming R2 and R3X vehicles. Beyond that, the Next-gen SDV architecture for which the JV will be responsible could be used for future refreshes as well as yet-to-be-announced future vehicles on the roadmap.

For VW Group, things are a little more complicated as the chart below illustrates:

In essence, VW Group now has a total of four(!!) electric vehicle platforms for use in the group’s brands (VW, Audi, Porsche, Lamborghini, Skoda, SEAT, Bentley and Cupra):

MEB/MEB+: This was the group’s first electric architecture which underpins vehicles like the VW ID3-5 cars, the Audi Q4 e-tron, the Skoda Enyaq, and even Ford’s Explorer EV through a partnership. (Full list of MEB-based cars).

The MEB+ uses the E3 v1.1 architecture which is owned by CARIAD.

CMP: As mentioned above, the China Main Platform (=CMP) is an upcoming platform focused on electric vehicles for the Chinese market.

It uses the CEA architecture, which is a joint development of XPENG, Volkswagen China Technology Company and CARIAD China

PPE: The so-called Premium Platform Electric (=PPE) was co-developed by Audi and Porsche for higher-end electric vehicles in the group, e.g. under Audi, Porsche and Bentley badges.

The PPE uses the E3 v1.2 architecture, which is also owned by CARIAD.

SSP: The VW Group Scalable Systems Platform (=SSP) was announced in July 2021, as part of Volkswagen's "New Auto" strategy, to have a "single battery electric vehicle (BEV) platform across all the group's brands". SSP was planned to be introduced in 2026 and intended to succeed the MEB and PPE platforms. By now, that launch seems to have been delayed to 2028.

Originally, the SSP platform was supposed to use a CARIAD-developed E/E architecture called E3 v2.0. That development faced a very long delay, which may have prompted VW to look elsewhere for expertise - in this case, Rivian.

During a conference call with journalists, VW Execs hinted that the first SSP-based vehicles in 2028 could now be using an adapted version of Rivian’s zonal E/E architecture.

Beyond 2030 the SSP platform would then transition to using the “Next-gen. SDV” architecture, for which the future Rivian/VW Joint Venture will be responsible.

Our take

Whew, there is a lot going on! 🤯

Essentially, this marks a lack of confidence by VW Group leadership in the ability of its subsidiary CARIAD to handle parallel development and maintenance of three EV architectures (E3 v1.1, v1.2 and 2.0).

At the same time, it puts a lot of confidence into the IP and talent of a relative newcomer like Rivian.

It remains to be seen if and how the JV will end up getting off the ground. We also wouldn’t be surprised if VW Group keeps pursuing multiple parallel avenues here.

We could see the JV architecture be limited to a subset of Group vehicles, primarily larger SUV-type vehicles for the North American market, while group-internal development resources conceptualize a competing architecture for the timeframe beyond 2030 that can play to other strengths in the vehicle portfolio.

3 Links 🔗

• Chargepoint makes friends👭: Chargepoint has been around for a long time. The charger technology provider (hardware & software) was started in 2007 and has dominated the US charging market for AC charging in the 2010s. But for all those years the company was never really focused on interoperability, instead highlighting the benefits of an Apple-like vertically integrated approach between its Cloud backend and its charging stations. That changed in 2021 when the company agreed to buy European backend provider has.to.be, which was known for its widely interoperable OCPP backend. Now, the European approach seems to have started to spill over into the mothership, as ChargePoint just announced a partnership that will make its cloud backend in the US interoperable with charging stations from Korean electronics giant LG. Could this mark a new era for Chargepoint in North America? (Link)

• Rivian Bidi news, yet again!↔️: Back in March we reported on the below during the Rivian R2 unveiling:

During Rivian’s recent 3hr investor day presentation, the company reaffirmed these plans and provided some additional details. Rivian is planning an upcoming 25kW DC bi-directional wallbox which will be backward compatible for DC V2G for all Rivian vehicles. Separately, the company confirmed that the R2/R3 platform (and maybe the refreshed R1’s?) will be capable of up to 11kW AC bi-directional charging. (ca. 1hr 1min in the video)

• Rimac’s Robotaxi 🚕 : The story of Mate Rimac, the founder of Croatian EV technology company Rimac Automobili, is inspiring. If you’ve never heard of him we recommend you check out his recent guest lecture at MIT:

So with this background, when you hear Mate put forward a bold idea - like a vertically integrated Robotaxi startup from Croatia - you hopefully don’t write it off immediately.

This week Rimac unveiled Verne, named for famed author Jules Verne, as the Croatian automaker’s first foray into driverless vehicles. The service will feature a purpose-built 2-seate electric vehicle designed by Rimac, and is set to launch in Croatia’s capital Zagreb as soon as 2026. With the important economic role that a company like Rimac plays in a smaller country like Croatia, we could see significant political support to remove regulatory roadblocks for this initiative in Zagreb as a test bed and launch market. We are excited to see more from Verne in the future!

Most-clicked link last week: Was the news about charging network Allego going private (Link)

Meme of the Week 🤡

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That's a wrap for this week! Let us know how you feel and leave some feedback (We read every single one of these 🙂 ):

Reader Review of the Week

Selected ⚡️⚡️⚡️ Pretty decent on⚡Why this charging network is going private and wrote:

“It is not surprising that Allego is delisting, it was always a company that could not survive in a competitive market thanks to its DSO DNA. This makes it accustomed to cash injections (as it is now) rather than really responding to market demand and competing.”

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