Rivian and Volkswagen group are forming a joint 50-50 venture to develop what they refer to as next-generation electrical architectures and software technology.

The partnership will focus on Rivian’s integrated software platform and zonal hardware design. The sharing of the technologies will serve as the basis for future software-defined vehicle development under the joint venture.

VW Group has announced an initial $1 billion investment in Rivian which will eventually ballon to around $4 billion more as part of this agreement.

The partnership aims to jointly develop vehicles at both companies. VW Group CEO Oliver Blume stated that Rivian’s software will be available to all VW Group brands, including Scout Motors.

VW Group emphasized that the partnership will expedite the introduction of software-defined vehicles. The company has faced challenges and delays at its Cariad software unit, impacting the launch schedules of critical new vehicles.

RJ Scaringe, CEO of Rivian, highlighted that the partnership with VW will ensure the successful launch of three new crossovers. Both companies aim to introduce vehicles featuring this technology in the latter half of the decade.

VW Group and Rivian will maintain separate operations for their vehicle businesses.