Update on VW Group Joint Venture with Rivian

[Scout Fan]

This is from the VW Group investor deck from Q3 2024.

 

[Taghkanic]

What does it mean?

 

[Chuckles]

The joint venture will give VW access to Rivian's electrical architecture and they will co-develop software. The billion dollars is an initial investment. Step two was ensuring that the Rivian tech will work with VW tech. Once the government approves the investment, the billion dollars will be converted into shares of Rivian in December. It seems like a win-win for both companies. Rivian needs cash, and VW has had issues the last couple years developing software.

 

[Administrator]

The joint venture will give VW access to Rivian's electrical architecture and they will co-develop software. The billion dollars is an initial investment. Step two was ensuring that the Rivian tech will work with VW tech. Once the government approves the investment, the billion dollars will be converted into shares of Rivian in December. It seems like a win-win for both companies. Rivian needs cash, and VW has had issues the last couple years developing software.

Great summary.

And not only does this give Scout a mature field tested software to plug right into their vehicles, they were likely able to shorten development time as well.

 

[RMK!]

Yeah, this is great news as Rivian comes closest to matching Tesla's software advantage. That said, the Tesla Supercharger Network is what makes BEV ownership seamless. Charge port location is a big deal and I hope Scout gets that right.

The ideal locations are:

Driver side rear

Passenger side front

 

[thespacecadet]

Yeah, this is great news as Rivian comes closest to matching Tesla's software advantage. That said, the Tesla Supercharger Network is what makes BEV ownership seamless. Charge port location is a big deal and I hope Scout gets that right.

The ideal locations are:

Driver side rear

Passenger side front

The concepts already showed the NACS port on the driver rear, so it's clear Scout's design and engineering teams are on the ball about this issue that other EVs have.

 

[Noremac]

The concepts already showed the NACS port on the driver rear, so it's clear Scout's design and engineering teams are on the ball about this issue that other EVs have.

There are disadvantages and advantages that comes with launching a bit later in the game compared to the competitors... see where they succeed and fail, but at the risk of not enough market area to capitalize on

 

[NorcalG]

Should we worry about VW? I read this on Jalopnik:

Volkswagen has been worrying investors in recent weeks with its falling profits, threats to shut factories and claims that it might only have a few years left.

Hopefully their cost cutting plans get them back on track so they can continue to invest.

 

[Callsign_DISCO]

Seems like almost all of the legacy OEM's are sucking wind right now - I'd propose it is at least in part due to pricing themselves out of accessibility for regular Joe/Jane customers plus at least in the US there are currently some other economic headwinds, supply chain disruption that haven't fully cleared up, labor issues, etc.

Between Rivian and Scout I think VW has something like $7B earmarked in the US EV space - you don't normally get to play with that kind of money unless you are a decent credit risk, so hopefully all the OEM's are able to flex to a model that returns them to stability.

 

[RMK!]

The concepts already showed the NACS port on the driver rear, so it's clear Scout's design and engineering teams are on the ball about this issue that other EVs have.

That is very good news and clearly demonstrates their understanding of the BEV infrastructure.

Should we worry about VW? I read this on Jalopnik:

Volkswagen has been worrying investors in recent weeks with its falling profits, threats to shut factories and claims that it might only have a few years left.

Hopefully their cost cutting plans get them back on track so they can continue to invest.

This is perhaps my biggest concern. If VW is the cash cow for Scout Motors then there could be trouble ahead. It could be 4-5 years before Scout realizes profit and that is a very long time without lots of cash. Going public like Rivian did might be the answer.

 

[timmyhil]

VW saying they will shut down would be like Ford or Toyota saying that. It wouldn’t ever happen. It would crash the market. Investors would come in and buy them out. And rebuild.

 

[VolInGa]

Should we worry about VW? I read this on Jalopnik:

Volkswagen has been worrying investors in recent weeks with its falling profits, threats to shut factories and claims that it might only have a few years left.

Hopefully their cost cutting plans get them back on track so they can continue to invest.

They can just add a few most limited edition Porsches each year to drive some cash flow.

 

[NYR]

VW saying they will shut down would be like Ford or Toyota saying that. It wouldn’t ever happen. It would crash the market. Investors would come in and buy them out. And rebuild.

The German government would likely prop up / bail out VW before it even got to that.

 

[NYR]

The joint venture will give VW access to Rivian's electrical architecture and they will co-develop software. The billion dollars is an initial investment. Step two was ensuring that the Rivian tech will work with VW tech. Once the government approves the investment, the billion dollars will be converted into shares of Rivian in December. It seems like a win-win for both companies. Rivian needs cash, and VW has had issues the last couple years developing software.

Begs the question - if Rivian ever is on brink of insolvency, whether VW would invest further capital to prop up the company (or even buy it outright) since it now relies on Rivian for such a big part of the Scout EV platform.

 

[Chuckles]

Rivian also makes delivery vans for Amazon. Amazon owns 17% of Rivian. They just have to hold on until their new products come out. The R2 and R3 look good on paper.