VW reveals why it’s investing $5.8 billion into Rivian: for internal organs

[Ajangel]

This is an article from Top Gear getting into details of the VW-Rivian joint venture.
https://www.topgear.com/car-news/electric/volkswagen-reveals-why-its-ploughing-58bn-rivian

 

[NukeDukem]

Hard to tell from here if that makes sense or not but it seems like a simplified architecture is the way to go.

 

[maynard]

Hard to tell from here if that makes sense or not but it seems like a simplified architecture is the way to go.

Agreed!

 

[PNW Nate]

VW already invested in and lost over 12 billion euros in CARIAD, its internal software group. That group performed so badly that it delayed several models (including the Porche MACAN and Audi Q6). I know software is hard but that is a giant bucket of fail.

The Rivian deal gets them software that works out of the box and is tested in production. Rivian obviously designed the platform to be flexible. I think this is exactly what the CARIAD group was tasked to do in 2020.

From that perspective VW got a great deal.
I think Scout will benefit from this. Software IS hard and they can focus on integration and manufacturing.

(I think VW made up a word e-hardware to hide their CARIAD failure, and Topgear is sockpuppeting it for them, as Topgear does.)

 

[anthonypape]

It’s important for them to do this because then they can argue we have ownership in Rivian and Rivian has no dealers or franchise lawsuits. So why can’t we have ownership in Scout and pursue a direct to consumer model. My guess is the US regulators will block the investment. It could the franchise lawsuits

 

[anthonypape]

Some speculation from Chat GPT. . Always fun

The Real Battle: Direct-to-Consumer Sales & Franchise Law

The biggest legal fight won’t be with the DOJ, but with state dealer franchise laws.
• VW & Franchise Lawsuits: VW can’t sell direct-to-consumers under its main brands (VW, Audi, Porsche) because of dealer agreements and state franchise laws that prohibit automakers from bypassing dealerships.
• VW’s “Scout” Loophole: VW created the Scout brand (inspired by the old International Harvester Scout) to sell directly to consumers like Tesla and Rivian. But state dealer associations are suing, arguing this is just a corporate trick to bypass franchise agreements.
• Why Rivian Matters to VW: Rivian already sells direct-to-consumers, so VW can use Rivian’s structure, expertise, and legal standing to strengthen its own case for direct sales.

Speculation: VW’s true goal might not just be software—it’s buying a legal argument to sell direct under new brands while still protecting its dealer-based brands.

Why Didn’t VW Just Buy Software from NVIDIA, Intel, Bosch, or ZF?

This is where the deal doesn’t fully add up if software were the only goal. VW could have:
• Licensed automotive AI software from NVIDIA or Intel.
• Bought existing software platforms from Bosch, ZF, or BlackBerry’s QNX.
• Partnered with Google’s Android Automotive OS like GM, Volvo, and Ford.

But that wouldn’t solve their DTC problem. Buying software from suppliers wouldn’t give VW a legal argument to sell directly to consumers—Rivian does.

Final Takeaway: Will the DOJ Stop This Deal?

Unlikely—this is not a monopoly or anti-competitive under federal law.
Real fight will be at the state level over direct-to-consumer sales.
VW might be using Rivian as a Trojan horse to argue for DTC sales without breaking existing franchise agreements.

If VW gets away with this, it could accelerate the decline of traditional car dealerships, much like Tesla already has.

 

[rivianwho]

It’s important for them to do this because then they can argue we have ownership in Rivian and Rivian has no dealers or franchise lawsuits. So why can’t we have ownership in Scout and pursue a direct to consumer model. My guess is the US regulators will block the investment. It could the franchise lawsuits

It's a 50/50 joint venture. VW Group has no ownership in Rivian. Amazon is still the #1 investor in Rivian by far.

As far as lawsuits,Rivian has had plenty of them to deal with.

 

[anthonypape]

A 50/50 joint venture sounds like ownership to me. No sense speculating I suppose.. This whole thing will be interesting to see play out. That and the faight of the franchise car dealer too. As this will give eveey manufacture an excellet blue brint and legal prescedent to do just that.

 

[rivianwho]

A 50/50 joint venture sounds like ownership to me. No sense speculating I suppose.. This whole thing will be interesting to see play out. That and the faight of the franchise car dealer too. As this will give eveey manufacture an excellet blue brint and legal prescedent to do just that.

50/50 in the JV not Rivian. The JV is a separate business entity than Rivian and VW Group.

Obviously, Rivian isn't the first EV manufacturer with direct to consumer sales model. Tesla pioneered it.

 

[anthonypape]

True but Tesla is successful beyond imagination. They have zero interest in VW. Rivian risks major blow back doing business with a company known for being one of the most unenvironmentally friendly businesses in all of history. And keep in mind there are only 3 companies selling direct to consumers With no attempt to ever franchise. And that is the key issue. Competing with your franchise dealers. That gives us Tesla, Lucid, Rivian. So VW must pick from these 3, ie they must pick Rivian. Please keep in mind I dont care what happes i have no dog in the fight . No problem with franchise dealers going away. But it has to be done fairly and by the letter of their existing cotracts.

 

[rivianwho]

True but Tesla is successful beyond imagination. They have zero interest in VW. Rivian risks major blow back doing business with a company known for being one of the most unenvironmentally friendly businesses in all of history. And keep in mind there are only 3 companies selling direct to consumers With no attempt to ever franchise. And that is the key issue. Competing with your franchise dealers. That gives us Tesla, Lucid, Rivian. So VW must pick from these 3, ie they must pick Rivian. Please keep in mind I dont care what happes i have no dog in the fight . No problem with franchise dealers going away. But it has to be done fairly and by the letter of their existing cotracts.

As the Scout CEO made perfectly clear, Scout is NOT VW but a separate American startup company and not legally bound to VW contracts.

Much like Rivian is NOT Amazon although Amazon is their majority investor.

 

[anthonypape]

Tell it the judge. If you Believe that I have an amazing new crypto currency i can let you in the ground floor. You need to empathize with the dealers legal argument. We could all care less about the dealer but look at the legality and put yourself in their shoes. VW says Scout is no more VW than Toyota or Tesla is part of VW. Hmm what a coincide ce that their product offering fills all the gaps in VW, Audi, Porsche. Listen Manufacturers create new brands the time . Its not fooling any judge. Lexus is really Toyota, Audi really VW. You can juat make up a new make and compete with your EXISTING networm. When will VW get their pick up truck? Elecric or not.

 

[anthonypape]

Last thing. Im not pro car dealer. But im not pro Lying or Fraud. If VW truly want to do this then buyout your deaLers. The cotracts are 5 years at most and require renewal by both parties

 

[JesseS]

Last thing. Im not pro car dealer. But im not pro Lying or Fraud. If VW truly want to do this then buyout your deaLers. The cotracts are 5 years at most and require renewal by both parties

If that's the case then VW can wait them out as it will be 3 years before the 1st Scout rolls off the line. Just not renew the contracts, most of them will be aged out by then in any case, and they can be redone to exclude Scout.

 

[anthonypape]

If that's the case then VW can wait them out as it will be 3 years before the 1st Scout rolls off the line. Just not renew the contracts, most of them will be aged out by then in any case, and they can be redone to exclude Scout.

Well that would work. It would be expensive. But obviously super profitable if they can pull that off. It sure will be inteeesting to watch. Now some states passed in my opinion unconstitutional laws saying a car must be sold by a dealer. But thats an obvious pay to play law and Elon and the others now have the money to outspend the dealer associations so Im sure they will get that archaic law repealed.