Big news out of Dearborn this morning: Ford has entered into a partnership with Rivian, the Michigan-based electric startup. As part of the agreement, Ford will infuse the company with $500 million, and get access to Rivian’s “skateboard” architecture. As a result, Ford will produce a Blue Oval product with Rivian underpinnings. This is a big win for both companies and a huge loss for GM, which had been in negotiations for some type of corporate tie-up with Rivian before talks broke down several weeks ago.
Details are scarce right now and we don’t know how Rivian will spend the cash or what type of vehicle Ford intends to make off the Rivian platform. But the company is definitely moving up in the world. This is the second infusion of cash Rivian has received, after Amazon led a round of investment to the tune of $700 million.
Rivian made waves last fall when it debuted its two vehicle lineup at the 2018 LA Auto Show. The pickup and SUV, named R1T and R1S, respectively, both have 400 mile range capacity with a three second 0-60 time in their top end trims, as claimed by Rivian. These are also the exact models customers will receive when their orders are fulfilled at the end of next year.
It’s possible we’ll get some behind-the-scenes look into how Ford and Rivian got together, but it’s entirely possible that Rivian CEO RJ Scaringe preferred Ford over GM, as the company was using its own fleet of F-150 pickups to test their batteries on public roads. Ford has already stated this new agreement will not alter their plans for the EV’s they have already announced, which includes a fully electric F-150 and an unspecified “Mustang inspired” utility vehicle to be revealed at a future date.
Does this amount to a coup from Ford? GM was reportedly in talks with Rivian but wanted an arrangement that hinged on exclusivity, and Rivian refused. Given the timing between the two announcements, it’s not hard to conclude that Rivian may have already been in talks with Ford and decided to simply choose the best deal, regardless of exclusivity.
The bottom line is that a relationship between Ford and Rivian has been firmly established. And their efforts will most likely be mutually beneficial for both companies. Ford can offer manufacturing expertise and quite possibly assemble Rivian products down the line. Rivian obviously has technology that Ford wants to incorporate into its own lineup. Whether that is the battery itself or the underlying layout of Rivian’s skateboard platform is anyone’s guess.
Another wrinkle to this whole EV partnership orgy is Ford’s recent alignment with Volkswagen. Ford will apparently build Volkswagen a midsize pickup based on the next generation Ranger while the German automaker will reciprocate by creating a new van for both companies. Both companies also expressed interest in mutually investing in autonomous vehicle and EV’s, and there was talk that Ford might use VW’s future MEB electric platform. VW recently invested just under $2 billion into Argo, Ford’s autonomous vehicle unit, but there has been no news about the two companies sharing any EV technology.
It’s a tumultuous time for the auto industry, as each company has to spend significant cash and resources on technology that won’t go mainstream for several more years. Ford’s endorsement of Rivian is a huge boost for the company, which seems poised to rival Tesla. It will be interesting to see how Rivian’s significantly different approach to fundraising and vehicle manufacturing affects its development when compared to the path Elon Musk chose for his company. For now it seems Rivian will get by with a little help from its friends.