Market Data 
By Victoria Waldersee
BERLIN (Reuters) -Volkswagen shares fell on Wednesday as investors worried about the cost and uncertainties of a joint venture with U.S. electric vehicle (EV) maker Rivian (NASDAQ:) aimed at beefing up Europe’s biggest automaker’s position in EVs.
The German group said on Tuesday it would invest up to $5 billion in Rivian as part of a venture to share EV platforms and software.
Analysts said the deal added to questions about Volkswagen (ETR:)’s own software subsidiary, Cariad, which has been struggling with years of delays and losses.
“The tie-up with Rivian is a further nail in the coffin of VW’s ambition to develop its own in-house standalone software stacks with its problem-prone and heavily loss-making CARIAD subsidiary,” Bernstein said in a note.
Volkswagen shares have more than halved over the past three years, hit by concerns the sprawling group may struggle to compete with nimble EV rivals in the United States and Asia and develop the software skills that underpin the new technology.
At 0840 GMT, Volkswagen’s shares were down 1.4%, the biggest decline on Germany’s blue-chip .
Some analysts also raised concerns about the size of the investment, with Volkswagen’s capital spending and R&D costs hovering at a stubbornly high 13% of auto revenues since 2018, according to Bernstein.
“While the transaction could make sense strategically … we believe investors would prefer VW to sell assets, not buy them,” Stifel Research said in a note.
Cariad, the brainchild of former Volkswagen CEO Herbert Diess, is undergoing a restructuring as a new executive team led by former Bentley production chief Peter Bosch attempts to bring the unit back on track.
Media reports in October warned of heavy job losses in 2024 and further delays to its new software architecture, dubbed 2.0.
Cariad CEO Bosch said in a LinkedIn post late on Tuesday that the Rivian venture would speed up Volkswagen’s software development efforts and lower costs.
Responsibility and resources for the development of a software-defined vehicle will be centralised in the joint venture, while Cariad will continue developing software for automated driving separately, a Volkswagen spokesperson said.
Roger Atkins of consultancy Electric Vehicles Outlook Ltd also raised concerns about whether Volkswagen and Rivian were compatible.
“There’s the culture issue – trying to combine Rivian’s full-stack vertically integrated and flexible, nimble software approach with Volkswagen’s more traditional approach of working with multiple suppliers and middle management is like shoving a square peg in a round hole,” he said.
