UBS raised doubts over Rivian‘s bid to become the auto industry’s ‘Android,’ days after founder and CEO RJ Scaringe reaffirmed the software-licensing strategy to the Financial Times.
In a new client note published on Tuesday, Joseph Spak commented on the interview with Scaringe, in which the brand’s chief said traditional automakers could lose market share if they don’t improve software and self-driving technology in their vehicles.
“A recent FT article on Rivian suggests that they’re trying to convince legacy automakers to use their electrical architecture and autonomous software,” UBS wrote.
The idea is not new, as both Rivian itself and its joint venture with Volkswagen Group have mentioned the possibility of licensing software to other OEMs.
According to the analyst, “the idea that the EVs from legacy OEMs could benefit from a common software platform (as well as a common ‘base’ hardware platform) makes sense as it should reduce the cost to make EVs and lower the capital intensity.”
UBS drew a parallel with the smartphone industry, where two operating systems — iOS and Android — dominate the market.
“This would make the automotive industry look more like the smartphone landscape, which is supported by large platforms (Apple, Android),” Spak wrote.
“In this example, it’s possible Tesla takes on the ‘Apple’ role” — tightly integrating its own hardware and software — “and Rivian attempts to take on the ‘Android’ role,” developing software for third-party users.
Despite the conceptual appeal, the Swiss bank said that the strategy faces significant near-term headwinds.
“Net, while we will continue to monitor developments and look for more color from the company at upcoming events, we have a difficult time seeing this platform model gaining traction near-term,” the analysts wrote.
FT Interview
In the Financial Times interview published late last week, Scaringe argued that traditional carmakers are failing to build competitive software in-house.
He attributed the problem partly to cultural gaps between automotive engineering and software development, and partly to geography — noting that much of the industry’s software and AI talent is concentrated in California.
Scaringe also pushed back against the narrative that consumers do not want electric vehicles.
He called it “a convenient explanation,” and argued that the real issue was that legacy automakers launched products that were adequate but not compelling enough to drive strong adoption.
The CEO said he hopes the first VW Group models built on Rivian‘s software and electrical architecture will serve as proof that the technology is transferable and attract additional OEM partners.
The first model under the shared architecture will be the entry-level ID.Every1, planned for next year. The model will be priced at around €20,000 ($23,500).
While the Volkswagen partnership currently covers electrical architecture and software, it could expand to include autonomy, AI and propulsion over time.
Software Licensing Pitch
The idea of licensing Rivian‘s software stack to other manufacturers has been a central element of the company’s long-term strategy for well over a year.
Late last year, Rivian‘s Software Chief Wassym Bensaid — who also serves as co-CEO of the Rivian–Volkswagen joint venture — said the partnership could eventually create software for the wider auto industry.
Bensaid described the goal as building a “reference operating system” for automakers, likening it to what Android represents in the smartphone market — the same analogy UBS now uses to frame its skepticism.
The software head admitted at the time that licensing software is “a very different ball game and a very different margin profile” compared to building cars.
More recently, at the SXSW conference in March 2026, Scaringe described the Volkswagen deal as “the first of what we believe will be many software and electronics deals.”
Speaking on stage, the CEO said that “all future Volkswagens, Porsches, Audis” and other VW Group brands “will use Rivian Electronics and Rivian Software as their core backbone.”
Software Revenue
Software is already a financially meaningful part of Rivian‘s business.
CFO McDonough said at the Morgan Stanley Technology, Media & Telecom Conference in March that software and services revenue is expected to grow approximately 60% in 2026, implying roughly $2.5 billion this year — up from $1.56 billion in 2025 and $484 million in 2024.
The bulk of that growth has been driven by the Volkswagen joint venture, which contributed approximately 60% of the company’s $447 million in fourth-quarter software and services revenue.
In February, the EV maker addressed the progress of the VW partnership and confirmed it expected to receive $2 billion from Volkswagen in 2026 — $1 billion in equity tied to winter testing milestones and a $1 billion non-recourse loan.
The winter testing milestone was subsequently completed in late March, unlocking the $1 billion equity tranche.
The Scalable Systems Platform developed through RV Tech is expected to underpin up to 30 million vehicles across Volkswagen Group‘s brands.
Tesla Software
The UBS analogy raises an interesting parallel on the other side of the equation.
Tesla, cast in the role of Apple, has tried — and failed — to license its own autonomous driving software.
CEO Elon Musk has repeatedly offered to license Tesla’s Full Self-Driving software to other automakers, dating back to at least 2021. The discussions have never resulted in an agreement.
In November 2025, Musk said bluntly that legacy automakers “don’t want it.”
He wrote on X: “I’ve tried to warn them and even offered to license Tesla FSD, but they don’t want it! Crazy.”
Tesla‘s Vice President of Finance Sendil Palani offered a more nuanced explanation at the time, noting that in some cases there was interest but the technical infrastructure was not in place.
“In some cases there has been great interest, but low feasibility,” Palani wrote on X, pointing to automakers’ inability to support over-the-air software updates as a key barrier.
The hardware challenge highlights a structural obstacle for the platform model UBS describes — leading the path to scaling a licensing business to narrow considerably.
Adding to the competitive landscape, Nvidia launched in January its own open-source autonomous vehicle AI platform, called Alpamayo-R1.
Nvidia CEO Jensen Huang said the company was building the platform “for everyone else” — a direct reference to automakers that lack Tesla‘s or Waymo’s proprietary stacks.
Near-Term Outlook
UBS’s skepticism centers on timing rather than the concept itself.
The firm acknowledged the logic of a common software platform for EVs but expressed difficulty envisioning the model gaining meaningful traction in the near term.
For Rivian, the immediate priority remains executing the Volkswagen partnership and ramping R2 production.
The company delivered 10,365 vehicles in the first quarter of 2026, a 20% year-over-year increase, and has guided for 62,000 to 67,000 deliveries for the full year.
UBS has a Neutral rating on Rivian‘s stock, with a price target of $16.
Based on Monday’s closing price of $16.92, the target implies a downside potential of approximately 5.4%.
Rivian shares have been under pressure as the third passenger model is two months away from beginning external deliveries.
After reaching a 2025 peak of $22.69, the stock fell roughly 40% to $13.58 in early February — around the time of the company’s fourth-quarter earnings report.
It has since recovered gradually to the $16–$17 range.
As of press time, the company was trading 2% high at $17.25 on Tuesday’s market session.
