Volkswagen Group and struggling EV maker Rivian have revealed plans to enter a joint venture for future EV software and platforms.

The JV will create next-generation software-defined vehicle platforms to be used in both companies’ future electric vehicles

The equally controlled and owned joint venture is expected to build on Rivian’s software and electrical architecture to create a best-in-class software-defined vehicle (SDV) technology platform.

Rivian’s in-market zonal hardware design and integrated technology platform are expected to serve as the foundation for future SDV development in the JV that will be applied to both companies’ vehicles. Rivian plans to contribute its electrical architecture expertise and is expected to license existing intellectual property rights to the joint venture.

Both companies aim to launch vehicles drawing on the technology in the second half of the decade.

In the short term, the joint venture is expected to enable Volkswagen Group to use Rivian’s existing electrical architecture and software platform. The partnership’s ambition is to accelerate Volkswagen Group’s SDV plans and transition to a pure zonal architecture.

Each company will continue to separately operate their respective vehicle businesses.

Volkswagen Group plans to invest an initial $1bn (£790m) in Rivian, with up to $4bn (£3.2bn) in planned additional investment.

Oliver Blume, CEO of Volkswagen Group, said: “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. We are strengthening our technology profile and our competitiveness.”

RJ Scaringe, founder and CEO of Rivian, remarked: “Since the earliest days of Rivian, we have been focused on developing highly differentiated technology, and it’s exciting that one of the world’s largest and most respected automotive companies has recognized this.

“Not only is this partnership expected to bring our software and associated zonal architecture to an even broader market through Volkswagen Group’s global reach, but this partnership also is expected to help secure our capital needs for substantial growth.

“Rivian was created to help the world to transition away from fossil fuels through compelling products and services, and this partnership is beautifully aligned with that mission.”

Existing work in recent months has validated that Rivian’s electrical architecture and software are compatible with Volkswagen Group’s vehicles. The two firms currently expect the JV to go live in the fourth quarter of 2024.