Volkswagen‘s technology chief commented on the software capabilities of the Group’s partner Rivian, describing the electric vehicle maker as “a small company” with software that represents “a really good starting point.”
Kai Grünitz, Member of the Board of Management of the Volkswagen Brand responsible for Technical Development, characterized Rivian as “a small company with just one project in one region, coming together with a group of 10 different brands from all over the world.”
“Combining both strengths is quite interesting and challenging at the same time,” Grünitz said in an interview with British automotive outlet Autocar.
Over €12 Billion Lost with Cariad
The comments highlight Volkswagen‘s dramatic strategic shift after investing approximately €12 billion in Cariad, its in-house software subsidiary, since its 2020 launch.
The unit was created to develop everything from parking assistance and navigation to battery management systems and vehicle connectivity.
At its peak in 2021, Cariad projected it could generate up to €1.2 trillion in revenue by 2030.
However, after facing internal bureaucratic struggles, Volkswagen has significantly scaled back the division, reducing its role to primarily managing partnerships with software-focused companies including XPeng and Rivian.
The $5.8 Billion Rivian Deal
Rivian and Volkswagen formalized their partnership in late 2024, with the German automaker committing $5.8 billion to the EV maker.
Under the agreement, VW will adopt Rivian‘s zonal architecture and software stack for its future electric vehicles.
The technology will debut in Rivian‘s upcoming R2 mid-size SUV, expected to launch in the first half of 2026, and the 2027 Volkswagen ID.1 model.
The R2 model will be serving as the first test case for the jointly developed architecture.
Rivian has recently secured the first $1 billion tranche of VW’s equity investment after achieving a gross profit milestone in the first quarter—a condition required for the funding to proceed.
Assessment of Rivian’s Tech
While praising certain aspects of Rivian‘s approach, Grünitz was frank about its limitations.
“Their software is not perfect,” he acknowledged, “but it’s a really good starting point.”
The VW executive emphasized that Rivian‘s over-the-air update capability sets it apart, noting that even first test vehicles can receive remote updates—”a huge difference” from traditional automotive development.
“It’s really another way of working,” Grünitz concluded.
Rivian‘s Software and Services segment has emerged as a significant revenue driver, largely through the VW collaboration.
Following second-quarter earnings released in September, CFO Claire McDonough reported “another strong quarter” with $376 million in revenue and $129 million in gross profit—most of it generated through the Volkswagen partnership.
When announcing the joint venture, VW said the deal would “reduce costs per vehicle” and fit “seamlessly into the existing software strategy.”
Tension Points in the Partnership
The relationship faces potential friction as VW considers expanding its internal combustion engine (ICE) vehicle lineup amid cooling global enthusiasm for electric vehicles.
German outlet Manager Magazin reported last month that Rivian has no interest in developing software for traditional combustion engine models.
The report came approximately one month before Grünitz’s latest comments, which occurred shortly after German media suggested the joint venture was experiencing setbacks.
Joint Venture Structure
The two companies established ‘RV Tech’ as their joint venture entity, with headquarters planned for Palo Alto, California—where Rivian already maintains substantial operations focused on autonomy, AI, software, and hardware development.
About Kai Grünitz
Grünitz has spent nearly 30 years with Volkswagen Group, beginning his career at Škoda before moving to the main VW brand in 2012.
Over the decades, he led multiple technical areas including mechatronic chassis systems, chassis development, and electrical-electronic development.
He assumed his current role as Board Member for Technical Development in late 2022, replacing Thomas Ulbrich, who became Tech Chief at Volkswagen China.
