(Financial Times, Stephen Morris, April 21, 2026)
RJ Scaringe, CEO of Rivian, has intensified the proposal for other major traditional automakers to license his software technology and electric architecture, following the agreement with Volkswagen. Scaringe warned that it is “inconceivable” for traditional players to maintain their market share without a high level of autonomy and vehicles increasingly defined by software and AI. “If you don’t have a high level of autonomy and a vehicle increasingly defined by software and AI, you will lose market share,” he said in an interview at his Palo Alto office. Rivian hopes that other legacy automakers will pay for a package of electric and autonomous software, avoiding spending billions to develop internal technology teams.
The $5.8 billion deal with Volkswagen, signed in 2024, foresees the launch in 2027 of the first €20,000 electric car, the ID.Every1, followed by more premium Audi models. Scaringe hopes these vehicles will provide the “proof of existence” that Rivian’s technology is transferable and attract other automakers similar to VW. The partnership currently covers electric architecture and software but could extend in the future to autonomy, AI, and propulsion. According to CFO Claire Rauh McDonough, Rivian has the opportunity to directly monetize R&D investments through various types of software licenses.
Traditional automakers are struggling in the transition to electric: Ford, Stellantis, Honda, and GM have recorded over $75 billion in write-downs after canceling models and supply contracts, especially after Trump’s decision to eliminate most federal EV incentives. Scaringe argues that this is not due to lack of demand but to the inability to build good electric cars. “Many companies launched products that were OK, not disastrous but not exceptional either. As a result, customers did not buy them,” he explained, citing the global success of the Tesla Model Y as proof of the huge existing market. Many automakers also face difficulties due to cultural differences between software development and mechanical systems development, and because they are in the “wrong physical location” to attract software and AI talent concentrated in California.
Rivian aims to license its software technology to major automakers.
“RJ Scaringe has intensified the proposal for other major traditional automakers to license his software technology and electric architecture. ‘If you don’t have a high level of autonomy and a vehicle increasingly defined by software and AI, you will lose market share,’ he warned. Rivian hopes legacy carmakers will pay for an electric and autonomous software package to avoid spending billions on internal teams.”
The Volkswagen deal as a “proof of transferability.”
“Rivian and VW will launch in 2027 the first €20,000 electric car, the ID.Every1, followed by premium Audi models. Scaringe hopes these vehicles will provide the ‘proof of existence’ that Rivian’s technology is transferable and attract other automakers. The $5.8 billion partnership covers electric architecture and software but could extend to autonomy, AI, and propulsion.”
The challenges of traditional automakers in the EV transition.
“Ford, Stellantis, Honda, and GM have recorded over $75 billion in write-downs after canceling models. Scaringe argues this is not due to lack of demand but to the inability to build good electric cars. Many struggle due to cultural differences between software and mechanical systems and because they are not located in the right places to attract tech talent concentrated in California.”
Rivian’s losses and hopes for the new R2 model.
“Rivian recorded a net loss of $3.6 billion in 2025 despite selling 42,000 R1 pickups. The company is betting on the new R2 SUV in the $45,000-$55,000 range to reverse the trend. The deal with Uber for up to 50,000 autonomous R2s and the investment of up to $1.25 billion also represent significant support.”
The need to continue investing.
“Even if the R2 reaches sales targets, the net loss will only reduce to $2.1 billion because Rivian continues to invest to achieve level 4 autonomy. ‘The path to becoming a large revenue company currently requires investing. It’s not that we accidentally lost a few billion dollars,’ Scaringe said.”
(Excerpt from the newsletter by Giuseppe Liturri)
