Volkswagen (OTC:VWAGY) will leverage its partnership with Rivian Automotive Inc. (NASDAQ:RIVN) to power its upcoming flagship electric vehicle, codenamed "Project Trinity."

What Happened: This collaboration is part of a $5.8 billion joint venture aimed at integrating Rivian's advanced architecture into Volkswagen's future models.

According to InsideEVs, Project Trinity, initially delayed, is set to feature Level 4 autonomous driving capabilities. The delay allows Volkswagen to focus on launching an electrified version of the Golf, described as a more "iconic product."

The Golf EV is expected to debut in 2029, with Trinity following at a later date.

Volkswagen CEO Thomas Schafer confirmed the partnership with Rivian during a media roundtable, emphasizing the importance of the new software-defined vehicle architecture.

"We decided on how to do the software-defined vehicle. It will happen with Rivian, the joint venture, where we put the new electric electronics architecture together," said Schafer.

While Project Trinity is not intended as a mass-market vehicle, it remains a crucial part of Volkswagen's strategy to rejuvenate its brand.

The new architecture will first appear in Porsche and Audi models by 2027, eventually extending across the Volkswagen family, including luxury SUVs and compact cars.

Why It Matters: The partnership between Volkswagen and Rivian marks a strategic move for both companies.

The joint venture, officially launched earlier this month, involves a $5.8 billion investment from Volkswagen, up from the previously announced $5 billion. This increase in investment underscores the importance of the collaboration for Rivian, providing a much-needed boost to its financial stability and growth potential.

The joint venture aims to advance electrical and electronic architecture technology, focusing on electronic control units, network infrastructure, and associated software. This partnership is expected to enhance Rivian's capital roadmap, aiding in future growth and vertical integration of its software and electrical systems, according to analysts at Wedbush.

However, the deal has not been without controversy, reportedly causing discontent among employees at Volkswagen's software division, Cariad.

Price Action: Rivian stock closed at $12.22 on Wednesday, surging 5.8%. In premarket trading on Friday, the stock was up 1.5%. Year-to-date, the Rivian stock has declined by 42%, according to Benzinga Pro data.

Analysts are bullish on Rivian, with the consensus rating being 'Buy' on the EV giant's stock. The highest price target is $28, while the lowest is $11. The consensus price target is $16.17, which implies a 32% upside.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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