Volkswagen‘s software alliance with US EV maker Rivian is falling short of expectations, prompting the German automaker to assemble a task force as delays mount across key vehicle programs.
“Volkswagen CEO Oliver Blume has made the software alliance with Rivian a central priority. But the Americans are delivering less than expected,” the German outlet Manager Magazine reported Thursday.
“Concern is growing particularly at subsidiary Audi about a further setback,” the report added.
The partnership, announced in June 2024 with an initial $1 billion investment from Volkswagen later expanded to up to $5.8 billion, aimed to leverage Rivian‘s expertise in vehicle software architecture to overhaul digital systems across Volkswagen‘s brands including Audi, Porsche, and the main Volkswagen marque.
However, Rivian is delivering less than anticipated, leading to integration difficulties and pushing back several model launches, according to the report.
Software Mismatch
Central to the challenges is a mismatch between Rivian‘s software, which is tailored for pure battery-electric vehicles, and Volkswagen’s broader portfolio that may continue to include combustion engine and hybrid models longer than originally planned, according to Manager Magazine.
This has compelled Volkswagen to sustain operations at its in-house software unit Cariad GmbH at additional cost running into billions of euros, the report said.
Cariad, established in 2020, has been plagued by development setbacks that contributed to delays in models including the Porsche Macan EV and Audi Q6 e-tron.
Customization Tensions
Internal tensions have emerged over software customization, according to the report.
Rivian favors a standardized platform to streamline development and reduce complexity, while Volkswagen’s premium brands — particularly Audi and Porsche — are pushing for greater flexibility to incorporate brand-specific features and user interfaces.
The disagreements have prompted crisis meetings, including sessions involving Rivian Chief Executive Officer RJ Scaringe, to reorganize project plans, Manager Magazine reported.
Model Delays
Specific vehicle programs affected include Audi’s refreshed Q8 e-tron SUV and the successor to the electric A4 sedan, both now delayed until 2028, and Porsche’s flagship K1 large SUV, which has been postponed indefinitely, according to the report.
The setbacks echo Volkswagen’s historical struggles with software development, which have drawn scrutiny from investors and analysts.
Blume has publicly championed the Rivian partnership as transformational, but the current hurdles have fueled concerns about the company’s competitive position against Tesla Inc. and Chinese rivals.
The company has said the joint venture remains on track for initial deliverables but declined to comment on specific delays. Rivian did not immediately respond to a request for comment.
Lincensing
Last November, Rivian’s Software Chief, Wassym Bensaid — who is also co-CEO of its joint venture with Volkswagen Group — said the companies could license its software to other automakers.
The executive said that the tech stack jointly developed by the two automakers “could become basically an opportunity for a standard technology stack that others can use as well.”
Bensaid believes RV Tech’s software could become the Android of cars — a standard “reference operating system” that other automakers could use as the foundation for their own technology stacks.
Rivian and VW Group Technologies
In late 2024, the two automakers formalized their partnership, with the German company committing an investment of up to $5.8 billion in the US EV maker.
In turn, Volkswagen adopts Rivian‘s zonal architecture and software stack for its future electric vehicles.
The Scalable Systems Platform (SSP) is expected to be used on up to 30 million vehicles across multiple brands and price segments of the Group.
