Volkswagen invests up to $5B in Rivian
bloomberg.com
bloomberg.com
Wow! I wonder if he was #1!
VW themselves says they want the investment for the Software of Rivian, which also is somewhat curious.
In another universe, I wonder if this could have been a partnership?
A company which does multiple acquisitions per year will have a team specialising in the integration of acquired companies, and practice and institutional knowledge of the issues of doing so. But a merger would be different - a smaller company will slot in under some existing executive, with maybe the CEO promoted into the top team if it's a really hot company; a merger would require the merger of two executive teams, which would be a difficult event. So yeah, might not be viable.
[1] https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitio...
That isn't how you can buy VW, the market cap is totally misleading. VW Group has a bizarre structure, it is actually directly controlled by some Porsche Holding company, which is directly owned by the Porsche–Piëch family.
I wasn't really quoting $58B as the price Apple would pay - just an indicator of the size of VW. But probably the wrong one I guess?
I know that a merger doesn't involve paying the market cap. It's more about convincing the shareholders that their final shares in the merged company would be worth more than the sum of whatever shares they have in each part. If it's legally structured as an acquisition, the purchase price is a bit of a fiction.
No, VW Group owns Porsche, the car brand. There is also Porsche SE which is a tiny company, which owns controlling shares over VW Group.
The short squeeze happened because there aren't actually that many shares around which you can buy.
>I know that a merger doesn't involve paying the market cap. It's more about convincing the shareholders that their final shares in the merged company would be worth more than the sum of whatever shares they have in each part.
Shareholders opinions are totally irrelevant. The only thing that would matter is the family who owns Porsche SE agreeing, which isn't going to happen.
Market cap is the product of the number of shares and what the market thinks a single share is worth. So the market cap matters as it puts a bound on what the price could be. But in this case the price at which shareholders would accept such an acquisition is irrelevant, as their is a single shareholder who holds controlling shares and gets to make the decision.
Then sign an IP/licensing deal that both halves of the new company have access to most/all of the IP developed historically.
I.E. securing any future VW profits, and ensuring that the IP licensing deal is indefinite, while staying hands off and allowing VW to keep doing what they do with the exception of using Apple software.
No, apple can not buy VW. This idea is totally absurd.
> In another universe, I wonder [about Apple + VW joining forces]
We're not speculating on what might happen tomorrow, just discussing hypotheticals for the scenario in which those companies were wanting to be partners of some kind.
Basically, shareholders expect you to invest all the cash in your stockpile for a similar percentage return (on average), and they won't want you to invest in a capital heavy but almost profitless industry like carmaking unless you think you can turn it into a business of similar profit levels per unit investment to your existing business.
And what would apple even do with the teams? They now have 10k people in Germany ready to design a car for them, sounds totally nightmarish.
Just to point out, that doesn't mean that you can buy VW for $58B...
Crippled ipadOS, lagging Safari, abysmal window management of macOS, total disaster of XCode, dumb Siri, degrading iTunes and iCloud isn't spotless either.
I don't think that is true at all. They even tried to create a separate company, just to focus on software, so that culture there could develop differently. It just didn't work out.
It's the classic mistake: you setup a separate 'startup style' company to move fast, but give them too much budget and too much rules, so they just spend the budget on rebuilding the same mess instead of innovation. It's a consultant heaven to make a lot of money, but in the end this really only works if the group company stays in the dark for a considerable amount of time and doesn't impose their ideas
This is an attempt to sidestep the politically hairy problem of changing a company’s culture. This never works because the daughter company either gets eaten by the more powerful parent company‘s culture, or their output is ignored and never integrated back into the parent.
I think the chances are slim, considering the general ineptitude regarding software development in German companies. They will get better until finally arriving at mediocre, but they will never be as great as American companies.
I hope one day they manage to implement a functioning CarPlay in their VW Polos, it has been broken since years.
Are there no auto manufacturers with ok software? Presumably it's not impossible.
The only in house auto software people don't seem to completely hate is Tesla.
These leadership people carry over the whole process and cultural mess into the new place while claiming to be "startup culture". Secondly, one major issue that frequently occurs but goes unnoticed is that, the pay is abysmal.
Basically, the leadership expect to hire talents for the same pay(or sometimes less) of what is paid in core group but forget that core group gets plenty other benefits(union benefits are immense things, educational budgets, pursue some other stuff for a while and then come back anytime to take up where you left off, family benefits, discounts, profit sharing etc.) and get confused when people obviously don't want to work for that kind of pay minus all the benefits.
So eventually, they hire a lot of expensive consultants, who create lot of busywork to induce artificial lack of manpower to hire more of them. Eventually, a lot of budget is spent, only thing left to show are a lot of irrelevant proof of concepts. Then core group finance people comes asking for massive budget cuts, when all of these consultants leave(with any domain knowledge) and suddenly a small firefighter internal people have to start cleaning up the mess and work long hours. Thanks to good social benefits, most people internally get frustrated due to such bad conditions and leave and then eventually the company folds.
Sadly, it is mostly a repeat playbook of big names and I have seen it happen three times already. I don't blame the consultant firms as it is not their fault to make as much billing as possible because they know there will be budget cut anytime. I don't blame internal people leaving because, they are never paid fairly, subjected to very bad conditions and they are free to leave and care about their wellbeing.
I kid you not, one of the failed project had only 1/7th of actual engineers building the software(and partially hardware), 4/7th were mostly leadership and management and rest 2/7th mostly HR, finance, regulation, legal, supply chain etc. And out of that 1/7th, only 10% were inhouse engineers, rest were expensive rented consultants, who were mostly busy doing politics.
The other two were slightly healthy ratio but managed to burn out the hardworking people by not understanding the actual requirements and introducing 200 steps of red-tape on everything.
If you've ever driven a Volkswagen EV and compared their software experience to what the likes of Rivian, Tesla, and Polestar have, this will come as no surprise.
I think any other vendor's software is better than this.
If it weren't for the insanely good driving experience (coming from a VW Polo before), the software would have definitely convinced us to go for another car.
Yes. But I consider this to be the least of its problems — if it were slow, but actually worked, I'd be OK with it. The problem is that it is quite simply broken in a number of ways.
It looks as if no management at VW ever used the car. It should be mandatory for management to use any new car design as their home/family car for a month or so. I'd imagine some problems would be fixed in no time. Things like the car forgetting charging settings, the car being unable to link driver profiles to key fobs (!) and distinguish between drivers, the fact that some settings are per-driver, while others are per-car, or the fact that the phone app doesn't display any useful information, especially if you have two drivers. I mean, I could go on and on. It's mind-boggling that software of this quality has ever been released.
The fact that VW invests in Rivian so it can potentially "use" its software is pretty telling in my opinion.
It's hard for companies to change that though. I think Apple did it well. AMD still needs to do it fully.
VW definitely does not believe that Software is unimportant or not a core part of the product.
They even tried to make their own software company to fix their inability to do software right.
1. Aisin owned by Toyota provides gearboxes to VW, Skoda, GM, Nissan, et al: https://en.m.wikipedia.org/wiki/List_of_Aisin_transmissions
2. Same car, different badges: https://en.m.wikipedia.org/w/index.php?title=Renault_Trafic&... (see "Also called")
The car manufacturers build up their cars using these almost off-the-shelf components.
As part of the joint venture with Rimac they gave Rimac the Bugatti brand:
That seems counter productive though, they seem to want Rivian tech. Usually their brands are managed centrally, so VW is developing platforms and architectures, which are then used by Skoda, Seat and Audio to make their models.
Yes, that is true. Maybe they want to do something similar in the US? Where they have some subsidiary doing largely independent development for more region specific models?
So it makes sense if VW were to integrate couple Rivian parts into a platform. It won't be a one-side win nor loss.
So that a Golf platform is first developed by VW and then productized by VM and Skoda, but Skoda is already developing next year's platform which VW will use.
Do you have any evidence for Skoda developing a platform on their own?
Audi and Porsche did do their own platform development, but that was never used by VW or Seat or Skoda and was for a completely different market segment.
https://www.autocar.co.uk/car-news/new-cars/skoda-handed-con...
Not developing as in starting from zero, but developing as in taking an existing platform and modifying/improving it for a new series of cars (in this case simplifying the platform to make it cheaper to produce, and targeting the very lowest end of the car market). Admittedly not a platform we're likely to see in 'the west', and sure it's nothing fancy, but I guess you have to start somewhere.
edit: reading back through the original thread, I agree that you are correct that Skoda is not developing a ground up platform that will be the basis for several VAG cars.
And it definitely isn't something which VW uses to base their own cars on.
Autocorrect strikes again!
I'm not sure if that's because we have a Rivian plant, because our local demographic likes pickup trucks, or both.
Their headlights are distinctive, making them almost impossible to miss.
[1]: VW Rabbit for the North Americans
They also have a tie-up with Xpeng in China for a China only EV platform.
Why have another iron in the fire with Rivian if they only make a US only truck and compact SUV ???.
VW is flailing about.
I'm all for it. The more Tesla competitors the better. I need them to be healthy. I'm probably about 5 years away from buying an EV (I just don't believe in the current crop and I've tested quite a few) and I'm not willing to be a guinea pig.
This can only be a good thing!
Some more discussion: https://news.ycombinator.com/item?id=40793174