Rivian Automotive (RIVN) and Volkswagen (VWAGY) may to look to expand their partnership as the German automaker seeks ways to crack the highly competitive electric vehicle market.
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Speaking to German magazine Der Spiegel, VW CEO Oliver Blume said the Wolfsburg-based company was looking at how to deepen cooperation with the California-based EV business beyond the existing software arrangement.
“For example, we are thinking about sharing modules and bundling purchasing volumes,” he said. “The Volkswagen group offers great opportunities for a small brand like Rivian.”
RIVN and VW announced a $6 billion tie-up in November that involves the pair sharing critical technology as they face stiffer competition from Chinese automakers.
RIVN Could Help VW with EV Competition
The planned cooperation is designed to reduce development costs and enable them to scale new technologies more quickly. And it comes at an important juncture for VW as it attempts to tap more of the emerging EV market.
The VW brand delivered 383,100 all-electric vehicles in 2024, a decline of 2.8%. In total, VW sales declined by 1.4% to around 4.8 million vehicles, with China sales for the parent brand down 8.3%.
Martin Sander, Volkswagen Board Member for Sales, Marketing and After Sales, said, said 2024 was a “difficult year.”
The heart of the joint venture is a plant in Palo Alto, California, where RIVN will develop electronic architecture for VW. Meanwhile RIVN can benefit from VW’s scale and depth of expertise in the auto industry.
Shares of RIVN jumped on news of the tie-up in November and have continued their ascent this year. Earlier this month the company said it delivered a total of 14,183 EVs during its Fiscal fourth quarter, topping Wall Street estimates.
Is RIVN a Good Stock to Buy?
Overall, Wall Street has a Moderate Buy consensus rating on RIVN, based on eight Buys, 12 Holds and two Sells. After 41% rally in the last three months the average RIVN price target of $14.43 implies around 1.5% of upside.
