Volkswagen AG (VWAGY.US) and Rivian Automotive, Inc. (RIVN.US) are exploring opportunities to license their jointly developed electric vehicle (EV) technology to other automakers. Their joint venture, RV Tech, has reported significant progress in creating an EV electrical and software platform to help Volkswagen compete with Tesla (TSLA.US) and Chinese rivals.

While RV Tech is currently focused on developing models for Rivian and Volkswagen, it is also engaging with third parties regarding the scalability of its platform. Wassym Bensaid, Rivian’s software chief and co-chair of RV Tech, stated, "We are solving a complex challenge for the broader automotive industry, which could also present an opportunity for other manufacturers."

The platform is designed to be scalable, accommodating various vehicle sizes and segments in Western markets. Bensaid emphasized that the profit potential from licensing this technology is "on a completely different scale" compared to traditional car manufacturing.

RV Tech also announced plans to begin winter testing of its systems in Audi, Volkswagen, and Scout models by Q1 2026. Volkswagen has previously licensed its technology to automakers like Ford and India’s Mahindra Group, which used its first-generation platform for their EVs.

However, Volkswagen now faces multiple challenges, including U.S. tariffs, declining deliveries in China, and weak demand in Europe. As part of its cost-cutting strategy, the company turned to Rivian for software and EV expertise—areas where its early models fell short. Volkswagen has committed up to $5.8 billion to this partnership, marking it as one of CEO Oliver Blume’s key strategic bets.

The joint venture, established a year ago, combines the software and engineering talent of both companies. They are working on Rivian’s centralized electronic architecture, which reduces computing units to streamline development and lower costs.

For Rivian, which has yet to turn a profit, this investment serves as a financial lifeline amid slowing EV market growth. Carsten Helbing, RV Tech’s co-chair, noted that while the venture prioritizes EV chassis development, the technology could also be adapted for combustion-engine vehicles.

The first vehicle to feature the new technology will be Rivian’s R2 SUV, launching early next year. Volkswagen’s €20,000 ($23,000) compact EV, the ID. EVERY1, will follow in 2027, along with rugged models under the Scout brand.

Volkswagen’s earlier in-house software efforts faced setbacks, delaying the ID series and hurting sales due to technical issues. However, with software improvements and model updates, the group—including Audi and Porsche—has seen EV sales growth in Europe this year.