Rivian-Volkswagen JV raises concerns from VW's software division Cariad
Rivian and Volkswagen's joint venture has raised concerns from the German automaker's software division Cariad.
In June, Volkswagen announced it would take a $5 billion stake in Rivian. The two automakers also plan to form a joint venture together. Rivian will be contributing its software and zonal electronics platform to the partnership.
Volkswagen has been struggling to develop compelling software to compete with those featured in other electric vehicles. In 2020, Volkswagen established Cariad, a car software organization, to create a uniform software and technology platform for the German automaker's brands.
VW's Rivian partnership has led to uncertainty and some frustration at Cariad. Last week, the chair of Volkswagen's works council, Daniela Cavallo, questioned VW CEO Oliver Blume's decision to outsource software development instead of addressing issues at Cariad.
"Can we be sure that this won't be the next billion-euro grave?" stated Cavallo.
Volkswagen has invested nearly €12 billion into Cariad to retain control of the company's software, including parking assistance, navigation, and battery management systems. Volkswagen's investment in Rivian has caused some uneasiness among Cariad employees, which may stem from the 2,000 job cuts at the company in late 2023.
"There's so much chaos right now. But we know it's more or less the end of Cariad," commented another Cariad employee.
A Cariad spokesperson told the Financial Times that Volkswagen's software strategy includes "forming strong development partnerships." The spokesperson added, "Cariad is part of shaping this overall strategy," which might address employee concerns.
Software will play a more significant role in the global auto market over the next few years, and Volkswagen seems keenly aware of this. The German automaker is partnering with other companies to develop software besides Rivian.
For instance, in 2022, Volkswagen announced a €2 billion joint venture with China-based Horizon Robotics to improve software development. Volkswagen's market share in China has been dwindling as local competition intensifies, and Chinese automakers launch more technologically advanced electric vehicles year after year.
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