Volkswagen's $5 Billion Investment In Rivian Has Some Experts Concerned About Scout's Planned Revival

Photo: Rivian

Rivian builds some outstanding electric vehicles. It also recently announced several new models, including the incredibly desirable R3X. To make those vehicles happen, though, Rivian needed money, and this week it announced that Volkswagen would invest up to $5 billion in the startup. That’s great news for Rivian and future customers holding out hope that the company would survive long enough to actually build the R3X, but as Automotive News points out, that does raise the question of what’s going to happen with its planned revival of the Scout brand.

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Back in 2022, Volkswagen announced plans to bring back Scout as an all-electric brand of trucks and SUVs, aiming for a brand image that’s “a mix of Levi’s Americana with Apple.” Which also happens to overlap pretty heavily with where Rivian sits in the market. Additionally, former CEO Herbert Diess who approved the Scout revival is no longer at the company. So it’s fair to question what Volkswagen’s plan is here.

In one note, UBS analysts wrote that they “wonder why VW is maintaining its €5 billion ($5.3 billion) investment in Scout. We would see significant potential overlap with Rivian here.” Another Bernstein analyst called the joint venture a “further nail in the coffin” for Cariad, Volkswagen’s in-house software division.

Cariad has had a rough go recently, with reports of infighting and project overload allegedly plaguing the unit. In December, it was forced to cut development costs by 20 percent, and it’s rumored they also offered buyouts to some of the 6,000 employees working there, mostly in Europe.

Additionally, Audi recently suggested it would share space in the South Carolina factory that was originally planned to be a Scout exclusive. So it’s possible there are more problems going on behind the scenes with the Scout revival. Gaining access to Rivian’s software and other R&D would certainly help with those issues, but at the same time, you have to wonder how VW will differentiate Scout from Rivian when they’re working together.

When asked for a comment, a Volkswagen spokesperson said, “Our commitment towards Scout has not changed at all. Clear focus is now on taking the next steps in our joint venture plans with Rivian.”