Ford invests $500m in EV start-up Rivian
Image credit: Rivian
The Ford Motor Company has invested $500m (£390m) in a strategic partnership with electric vehicle start-up Rivian.
The two companies have agreed to work together to develop an all-new, next-generation battery electric vehicle for Ford’s expanding EV portfolio using Rivian’s flexible ‘skateboard’ chassis platform. The platform houses a large battery pack, suspension, axles, cooling system and four electric motors.
Rivian stands to benefit from Ford’s mature skillset and all-round expertise in automotive manufacture, as well as in successfully establishing a new car marque.
The partnership is in addition to Ford’s existing EV plans. As part of its previously announced $11bn (£8.6bn) EV investment, the Detroit-based automotive giant has already confirmed two fully electric vehicles: a Mustang-inspired crossover, due in 2020, and a zero-emissions version of its best-selling F-150 pickup truck.
“This strategic partnership marks another key milestone in our drive to accelerate the transition to sustainable mobility,” said R.J. Scaringe, Rivian founder and CEO. “Ford has a long-standing commitment to sustainability, with Bill Ford being one of the industry’s earliest advocates, and we are excited to use our technology to get more electric vehicles on the road.”
“We are excited to invest in and partner with Rivian,” said Bill Ford, Ford’s executive chairman. “I have gotten to know and respect RJ and we share a common goal to create a sustainable future for our industry through innovation.”
Jim Hackett, Ford president and CEO, added: “As we continue in our transformation of Ford with new forms of intelligent vehicles and propulsion, this partnership with Rivian brings a fresh approach to both. At the same time, we believe Rivian can benefit from Ford’s industrial expertise and resources.”
Rivian’s website carries the message “Keep the world adventurous forever”, in line with the company's focus on producing solely electric vehicles. It has thus far developed and demonstrated two concept models ready for production: a five-passenger pickup truck, the R1T, and a seven-passenger SUV, the R1S. Both are claimed to deliver approximately 400-plus miles of range, with an unmatched combination of performance, off-road capability and utility. Delivery to customers is slated to begin in late 2020.
Similar to other EV startups, such as Byton, Rivian has development centres in several key technology locations - Plymouth, Michigan; San Jose and Irvine, both in California; and Surrey, England - as well as a 2.6-million-square-foot manufacturing plant in Normal, Illinois.
Ford’s partnership in Rivian is not the latter company’s first major cash injection this year: the start-up also received $700m (£540m) from an investment round led by Amazon earlier in 2019. It previously raised $500m (£390m) from Sumitomo, a Japanese conglomerate, and Abdul Latif Jameel, a Saudi industrial group. The money will help Rivian establish its US manufacturing facility, which is expected to have a manufacturing capacity of 250,000 vehicles per year. Following the 2020 launch of its debut vehicles, Rivian wants to sell 20,000 cars in 2021, doubling to 40,000 in 2022.
After Ford’s investment has received the customary regulatory approval, Rivian will remain an independent company. Joe Hinrichs, Ford’s president of automotive, will join Rivian’s seven-member executive board. In February, Reuters reported that General Motors was in discussions with Rivian. It now looks like Ford has beaten its big rival to this electric punch.
Ford already has another significant EV partnership deal in place with Volkswagen, which will see Ford using the German carmaker’s MEB platform, which is short for ‘Modularer E-Antriebs-Baukasten’ (German for ‘modular electric-drive construction kit’).
Ford’s not-insignificant investment of half a billion dollars in further electric vehicle technology could be a disturbing development for Tesla. While Tesla has had first-mover advantage in the pure EV space over recent years - and remains the number one electric vehicle retailer in the US, selling around 250,000 cars in 2018 - the more traditional (and much longer-established) auto manufacturers are rapidly catching up.
Elon Musk, Tesla CEO, announced this week that a capital raise could be imminent, as the electric vehicle maker lost $700 million in the first quarter of 2019. Musk predicted a return to profit in the third quarter. Tesla has had its problems with production and has raised its prices, but Musk remains bullish about Tesla’s future, routinely making ebullient, extravagant claims.