What is Rivian's software secret that Volkswagen so covets?

The difference in approach to software and electronic hardware can be compared to that of two homeowners. Rivian has bought a plot of land and planned a house fit for the modern age. In true Grand Designs style, the build has gone wildly overbudget, but it works. Meanwhile, Volkswagen is renovating a Georgian pile. Cost and time constraints mean that it’s cheaper and easier to bodge the existing structure. So Volkswagen has eyed up Rivian’s gaff and decided that in the future it wants to copy the same structure for itself.

Scaringe told investors that Rivian would never have been able to upgrade its architecture from Gen1 to Gen2 at the speed it has done with legacy industry methods.

“It wouldn't have been possible in the time that we did,” he said. “We’d have had to coordinate across 50-60 different ECUs [electronic control units] across a variety of tier-one suppliers.”

This Gen2 architecture uses seven powerful ECUs (essentially miniature computers), down from 17 in Rivian’s current EVs. The four biggest of those computers control different ‘zones’, for example one for autonomy functions and another for infotainment. It also reduces the length of wiring needed by 1.6 miles per car and shaves 20kg off the total weight, Rivian said.

Rivian is planning to first roll out the Gen2 architecture in its R1T pickup and R1S SUV this winter, it said. The architecture will also be used in the smaller R2 and R3 that it plans to build in its new factory in Georgia.

Rivian said it had added 500 new features to its R1 range over the past two-and-a-half years via more than 30 over-the-air software updates. 

Customers of the Volkswagen ID3 and other EVs meanwhile are complaining on social media that they're still having to go to dealerships to get software upgrades – a neccesity the digital revolution was supposed to do away with.

Rivian claims 80% of its software is programmed in-house, giving it enviable ability to push through features that existing users have called for.

“We have the ability to make the vehicle better and better over time,” Rivian software chief Wassym Bensaid told investors. “When our customers wanted to add have [charging] prescheduling, we could do it.” 

Bensaid gave the example of a customer who configures her car back to her commuting preferences after the weekend, including temperature and music streaming through her phone. “In the legacy auto world, we would need [to communicate] with 30-plus ECUs in order to do it. This is 30-plus suppliers, with 30-plus [types of] black-box software – different interfaces, different requirements, different integration, different test methodology,” explained Bensaid.

Starting from scratch is a luxury available to start-ups, led by Tesla’s approach and continuing with the likes of Rivian and Chinese firms such as Nio, Xpeng (also a Volkswagen partner) and Leapmotor (now partially owned by Stellantis). 

These manufacturers are getting closest to the ideal software-defined vehicle, which car makers see as the key to unlocking new revenue from additional digital features.

The big question now is where exactly is Volkswagen going to embed Rivian’s Gen2 architecture. The first cars with the system are expected in 2027, which is about the same time that the first EVs based on Volkswagen's new SSP Sports premium EV platform are due (from Porsche, Audi and Bentley).

Could the Rivian network of wiring, computers and sensors really be transferred in full to the pinnacle of Volkswagen’s range? How would that fit with existing tech-focused supplier relationships, for example active safety specialist Mobileye and chipmaker Qualcomm? 

The other significant question is where this leaves Scout, Volkswagen's incipient American electric off-roader brand, which will compete directly with Rivian.

“[We] wonder why Volkswagen is maintaining its €5bn investment in Scout,” UBS bank analyst Patrick Hummel said in a note. “We would see significant potential overlap with Rivian here.”