VW and Rivian can form joint venture

Today the Bundeskartellamt has cleared under merger control the formation of a joint venture between Volkswagen and US electric car manufacturer Rivian as well as VW’s acquisition of a minority shareholding in Rivian Automotive Inc. VW and Rivian will each hold a 50 per cent share in the joint venture, which aims to develop the next generation of the so-called E/E architecture for electric vehicles.

This architecture describes how the various electrical and electronic functions are designed and embedded in vehicles, including the necessary control units, sensors, etc., and how they interact.

Andreas Mundt, President of the Bundeskartellamt: “At its core the cooperation project is about the way in which a large number of complex functions and components are best organised in cars and how they interact with each other. As cars become increasingly digital and connected, the question of the right system architecture is nothing less than a key competition parameter. When it comes to cooperation projects set up to develop new products and technologies in key cutting-edge sectors, particularly those involving large companies, we take a close look at competition in innovation. The project does not raise any concerns in this respect, nor does it raise any other serious competition concerns.”

E/E architecture is currently undergoing a major change as the market no longer considers the currently prevailing architectures with many distributed control units to be sufficient for future vehicles. The foreseeable shift to electric mobility means that cars will contain significantly more electrical and electronic components in the future. This also applies to the autonomous driving functions and network-based value-added services integrated into vehicles. In this context, software is expected to play an even greater role in the future.

The project could be cleared under merger control as it was not expected to significantly impede effective competition. This is the case regardless of whether the relevant market is considered to consist of the E/E architecture as a whole or of various sub-systems and sub-services. There will still be a sufficient range of services available to car manufacturers to build E/E architectures. There is no reason for concern that competition in innovation in the field of E/E architecture will be impeded to a significant extent. Lastly, competition in the downstream markets for vehicles in which E/E architectures are used is not expected to be seriously impeded either.