VW Group JV with Rivian Update

[Hilbe]

From the VW Group investor deck from Q3.

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[tbolts10]

So is this Scout? Or something totally unrelated?

 

[electruck]

So is this Scout? Or something totally unrelated?

No, this is related to the joint venture announced earlier this year. Scout will likely benefit from the JV's product, as will every other brand in VW Group.

https://rivian.com/newsroom/article/rivian-and-volkswagen-group-announce-plans-for-joint-venture

 

[BCondrey]

JV is Joint Venture, I think. The VW & Rivian partnership agreement.

 

[mudito]

This is huge for Rivian's survival. And also for VW to actually get better quality Software-Defined Vehicles

 

[Newtonrj]

And Rivian gets to subsidize certain aspects of their SDV architecture through the JV.

What I'd like to know is:
- What/if any does Rivian get from VW through the JV agreement?
- Do they, for instance, get volume discounts from VW vendors? Think batteries, motors, robotic assembly, export transportation (sea freight from US)
- GA plant setup help for R3?

There are other questions about common architecture support as well but these kinds of issues would be spelled out in the JV details not yet released to public.

 

[R1Tom]

Rivian might benefit from VW Group audio processing software....just saying....haha!

 

[Florida Panhandler]

Rivian getting Cash is the most important thing. Scout’s drivetrain and suspension as per the prototypes are fundamentally different than anything Rivian has. The mechanical lockers, solid rear axle and traditional frame are way different than the skateboard /independent suspension on Rivian’s to be able to assemble on a common line series.

The driving experience between Scout and Rivian will be very noticeable, presumably with Scout having much more of a Wrangler-type driving experience (rough ride, vague steering, etc) while offering tremendous off road capability and somewhat easy suspension customization. Rivian’s suspension is much more Range Rover with better on road characteristics and offering a moderately good off road Experience In comparison.

 

[UnsungZero_OldTimeAdMan]

So is this Scout? Or something totally unrelated?

All of VW Group. All brands.

 

[PeterSK]

And Rivian gets to subsidize certain aspects of their SDV architecture through the JV.

What I'd like to know is:
- What/if any does Rivian get from VW through the JV agreement?
- Do they, for instance, get volume discounts from VW vendors? Think batteries, motors, robotic assembly, export transportation (sea freight from US)
- GA plant setup help for R3?

There are other questions about common architecture support as well but these kinds of issues would be spelled out in the JV details not yet released to public.

Several articles and interviews I have seen highlight that the JV (and thus Rivian) will get better pricing on electronics, etc. because they are potentially buying millions instead of tens of thousands of units. Whether this applies to other, broader parts categories like motors, glass, tires, what have you, wasn’t clearly stated in any of them.

The best explanation I’ve seen of the JV and its rationale is this CNBC video from September 2024. There’s a bit of hyperbole (eg calling Rivian a failing startup) but overall it is balanced and informative.

 

[DD4ST]

Some Rivian services at VW dealers? The Rivian SC model is unsustainable for growth. Could reserve the current SC’s for depot-level service (really deep/hard stuff) and VW dealers for field-level service (smaller fixes like tires, alignment, plug-n-play replacements, certain recalls, etc.). This is a common model in the military. Would probably replace mobile service as it is now.

 

[UnsungZero_OldTimeAdMan]

eg calling Rivian a failing startup

If you're a journalist who doesn't live, eat and sleep automotive—and not even a serious business journalist*—it's easy to get that impression; when a casual web query return numerous editorials of how "Rivian is losing $X per car" and that's about the extent of your research.

*Nearly all new businesses "lose" money before they are profitable. Some old businesses are losing money now, even though they were once successful. NYT headline from yesterday: "G.M.'s Electric Vehicle Sales Surge as Ford Loses Billions"

 

[Moodist]

Several articles and interviews I have seen highlight that the JV (and thus Rivian) will get better pricing on electronics, etc. because they are potentially buying millions instead of tens of thousands of units. Whether this applies to other, broader parts categories like motors, glass, tires, what have you, wasn’t clearly stated in any of them.

The best explanation I’ve seen of the JV and its rationale is this CNBC video from September 2024. There’s a bit of hyperbole (eg calling Rivian a failing startup) but overall it is balanced and informative.

Thanks for sharing, it’s a good watch, good provocative points about wether Rivian should focus on cars or software, also interesting where VW might want to just buy Rivian.

 

[UnsungZero_OldTimeAdMan]

Directly, the JV would impact Rivian's per unit cost on shared components for the zonal architecture. Indirectly, the JV could give Rivian more credibility/importance when negotiating parts that aren't shared. RJ recalled in multiple public appearances how many suppliers did not take Rivian seriously (high prices, lower delivery priority and probably even delivered lower quality goods; see legal battle with Bosch).

 

[docwhiz]

Rivian getting Cash is the most important thing. Scout’s drivetrain and suspension as per the prototypes are fundamentally different than anything Rivian has. The mechanical lockers, solid rear axle and traditional frame are way different than the skateboard /independent suspension on Rivian’s to be able to assemble on a common line series.

The driving experience between Scout and Rivian will be very noticeable, presumably with Scout having much more of a Wrangler-type driving experience (rough ride, vague steering, etc) while offering tremendous off road capability and somewhat easy suspension customization. Rivian’s suspension is much more Range Rover with better on road characteristics and offering a moderately good off road Experience In comparison.

Does Rivian get any cash?
The slide says "Mandatory convertible note" and then "Convertible note to equity".
Equity in VW is pretty worthless.

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