Volkswagen has turned to Tesla rival Rivian to fix its software woes.
The companies sealed a $5 billion partnership in 2024, with Rivian providing tech for VW’s new EV.
A Rivian exec told BI the nearly 100-year-old German automaker had embraced Rivian’s “startup DNA.”
Rivian and Volkswagen’s partnership has injected the nearly 100-year-old German automaker with a dose of “startup DNA”, according to one of the Tesla rival’s top executives.
The two companies struck a $5 billion deal last year to form a joint venture to develop next-generation EV technology, and Rivian’s chief software officer told Business Insider that he was impressed by how willing the legacy carmaker had been to change its culture and embrace the startup’s Silicon Valley vibes.
“One of the reasons we really leaned in heavily into the partnership was the willingness of the Volkswagen leadership to change culture within the group,” said Wassym Bensaid, who also serves as co-CEO of the joint venture.
“They were willing to adopt a much more agile, iterative, innovative approach to the entire development lifecycle, and keep the startup DNA that Rivian brings,” the executive added.
The partnership will see software and electrical architecture developed by Rivian appear in a range of Volkswagen vehicles, including a $22,500 electric car VW unveiled in March.
Like other legacy automakers, the historic German brand has struggled to develop vehicle software that can match the kind of high-tech features offered by Tesla and Chinese rivals like BYD.
Volkswagen’s in-house software division, Cariad, has faced delays and high-profile glitches despite burning through billions of dollars.
The failure to develop advanced software has proved particularly damaging in China, where consumers have come to expect EVs packed with AI-powered features such as voice control, autonomous driving, and even in-car karaoke.
Volkswagen’s sales collapsed nearly 10% in China in 2024 compared to the previous year.
Speaking on the sidelines of The Financial Times’ Future of the Car conference, Bensaid said the challenges Volkswagen has faced were far from unique.
“The same problem that we need to solve for Volkswagen exists in pretty much every single traditional automaker,” he said.
Bensaid added that building software-defined vehicles would require legacy carmakers to undergo “deep cultural change” and become flatter and less hierarchical, whilst also hiring “very different talent.”
“You need very different engineers who know how to build things and not just engineers who manage third-party suppliers in a black-box way,” he said.
Bensaid said many carmakers would likely find it easier to follow Volkswagen’s lead and license software from tech-focused companies like Rivian, adding that he expects tech licensing to become a much bigger part of the EV startup’s business in the next few years.
“Volkswagen as a company tried to basically make the pivot and get to a software-defined vehicle. And they ended up concluding that a partnership [with Rivian] could be a great way to achieve that,” Bensaid said.
Read the original article on Business Insider
