US-based EV truck maker Rivian and Volkswagen (VW) have announced their intention to form a joint venture to create next-generation electrical architecture and best-in-class software technology.

VW plans to make a $5bn investment into Rivian that has yet to turn a profit as it seeks to compete with likes of Tesla in the electric truck market, VW, for its part, has been feeling the pressure from China in the EV market. The partnership will accelerate the development and lower cost per vehicle by increasing scale and speeding up innovation globally.

Both companies aim to launch vehicles benefiting from the technology created within the joint venture in the second half of the decade. In the short-term, the joint venture is expected to enable VW to use Rivian’s existing electrical architecture and software platform. Each company will continue to separately operate their respective vehicle businesses.

Oliver Blume, CEO of VW said: “Our customers benefit from the targeted partnership with Rivian to create a leading technology architecture. 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."

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