VW and Rivian: Acquire instead of grueling self-production?
The cooperation between VW and Rivian is just the latest announcement in a long series in which traditional OEMs purchase modern vehicle platforms from a new, software-oriented OEM – in addition to the deals that have already been concluded but not yet announced. Several leading OEMs developed a new centralized HPC architecture (High Performance Computing) to use in their vehicles, but it seems that this idea is losing traction, given the many technical difficulties they encountered.
Therefore, buying a ready-made, state-of-the-art architecture is much easier. For example, more than half of the top 10 OEMs (by volume) have already made agreements to purchase platforms from Chinese OEMs. This raises the question of whether traditional OEMs will ever be able to develop a competitive modern E/E architecture, or if this will instead remain in the hands of Chinese OEMs and other new players in the future. This would change the balance of power in the automotive sector, as traditional OEMs would no longer have strong control over the core of the technology embedded in vehicles.
New platforms continually add more complexity
VW is now acquiring various platforms from SAIC Motor, XPeng, and Rivian. Even if the deals with SAIC Motor and XPeng apparently only apply to the Chinese market, this raises a question mark regarding significantly increased complexity due to managing multiple platforms. Just recently, we heard from OEMs how proud they were to have reduced their number of platforms, but it seems that this is no longer the case.
According to reports, VW is paying $5 billion for access to Rivian’s platform – this amount is a bargain compared to the costs VW had to expend for the development of its MEB platform. The costs are another crucial point that make traditional OEMs more inclined to purchase rather than produce in-house.
But that represents a significant shift from the “do it yourself” mentality that traditional OEMs had just a few years ago.
What does that mean?
Speed is key – and here VW seems to have completely gotten tangled up in software matters. This is why they are currently preferring to buy quickly (and sometimes cheaply) from everywhere instead of developing in-house. That is indeed a shift in mentality.
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