Ford Motor Company has made a major investment in Rivian, a Michigan-based electric vehicle producer that made waves at last year's Los Angeles Auto Show with its striking, long-range, all-electric R1S SUV and the R1T pickup truck. The Blue Oval is pouring $500 million into the brand and has confirmed via an official release that it will develop an exclusive, new electric vehicle from a Rivian platform. According to Ford, this new vehicle will exist in addition to its current battery electric plans, which include an all-electric, Mustang-inspired crossover and an electrified F-150 pickup. During a conference call with reporters, Ford confirmed that Rivian will assemble the skateboard platform at its Normal, Illinois factory, but that the Blue Oval would handle production. The automaker didn't go so far as to say where final assembly would be or for what brand or market it would compete in. But the two companies confirmed that the Ford vehicle wouldn't necessarily compete with Rivian's entries. We Talk Shop On The Ford/Rivian Partnership: Ford Invests $500M In Rivian: Motor1.com U.S. Podcast E004 Ford’s Joe Hinrichs is also set to join Rivian’s board of directors as part agreement. “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," Rivian boss RJ Scaringe (above, left) said. In a conference call with reporters, Scaringe confirmed his company had discussed partnerships with other automakers. Rumors had put GM in the running, and Scaringe said there could be applications with other partners down the road, but that it was focused on executing with Ford. As for Ford's partnership with Volkswagen, the Blue Oval says it won't have an impact. According to Hinrichs, Rivian's skateboard platform and VW's MEB architecture help the company in different areas. It's still early days for this partnership, but following its alliance with Volkswagen, Ford's investment in Rivian is yet another reminder of how serious the company is about pushing into electrification.<doc-sep>Ford Motor has agreed to invest $500 million in Rivian, an electric-car start-up that is widely seen as a potential rival to Tesla, Ford announced on Wednesday. Rivian, based in Plymouth, Mich., plans to begin producing a pickup truck and a sport utility vehicle by the end of next year. Both will be powered by battery packs and are designed to be luxury vehicles that could appeal to many of the consumers drawn to Tesla and its upscale models. The retail giant Amazon led a $700 million investment in Rivian in February. Ford is counting on the partnership to accelerate its efforts to field a range of electric cars and trucks, while it also pushes to streamline operations, slash costs and increase profitability. The company’s turnaround effort has shown little tangible progress since Jim Hackett became chief executive two years ago. Ford’s stock has fallen about 9 percent since his arrival. On Thursday, Ford is scheduled to report its first-quarter earnings, and many analysts expect a decline. In 2018, its profits fell more than 50 percent.<doc-sep>Rivian EV Pickup Truck. Adam Jeffery | CNBC Ford's $500 million investment in electric truck maker Rivian became a possibility shortly after the start-up's talks with Detroit rival General Motors broke down about eight weeks ago, according to someone familiar with the discussions. It was widely speculated, and reported, that GM was looking at Rivian. In the end, GM wanted too much — exclusive rights to the start-up's technology, said the person, who declined to be identified because the talks were private. Ford's opening came after GM, which declined to comment, refused to budge. Rivian CEO RJ Scaringe already had a personal friendship with one of Ford's board members, a classmate from the Massachusetts Institute of Technology. And Ford made him a deal that allows Rivian to move ahead with plans to develop its own brand and dealer network and potentially sign up other automotive partners. No such deals are currently planned, Scaringe told reporters on a conference call Wednesday. The investment in Rivian is "consistent" with Ford's own electrification program, the 116-year-old automaker's CEO, Jim Hackett, said on the call. Ford last year announced it would invest $11 billion to develop battery-based vehicles, including hybrids, plug-ins and pure battery-electric models. The Rivian investment will come on top of that previous figure. "I think Ford sees multiple areas of potential benefit," said Stephanie Brinley, principal automotive analyst at IHS Markit. At the Los Angeles International Auto Show in November, Rivian unveiled two battery-electric vehicles, or BEVs, the R1T pickup and the R1S sport utility vehicle. Both ride on a flexible, skateboard-like platform in which batteries, motors and other key components are mounted below the floorboard. The layout has a number of advantages. Not only does it lower a vehicle's center of gravity — enhancing handling — but it frees up space normally devoted to an engine compartment for adding passenger and cargo space. Both the R1T and R1S, for example, have "frunks," or front-mounted trunks. Rivian EV SUV. Adam Jeffery | CNBC The first generation of Ford's electrified vehicles, which includes full battery power and hybrids, sacrificed passenger and cargo space to make room for batteries and other components. That is a problem that the automaker aims to address as it gets ready to roll out a second generation of products that also will deliver more than 200 miles in range, or at least double what products like the current Ford Focus EV can manage between charges. "Ford is going to use Rivian's flexible skateboard platform to develop an all-new, next-generation battery-electric vehicle," Hackett told reporters. But neither he nor other Ford and Rivian officials would discuss specifically what sort of vehicle they are working on. They noted that Ford is already well along in the development of a high-performance electric SUV that is set to debut next year, as well as an all-electric version of the popular Ford F-150 pickup. The Rivian platform will be used for a different product line, said Joe Hinrichs, Ford's president of automotive operations. Industry analysts say the Rivian platform could eventually be used for other electric vehicles at Ford to help maximize economies of scale. But there is at least one obstacle that could limit future applications, said Brinley, of IHS Markit, the potential capacity of Rivian's assembly plant. The start-up last year acquired the old Mitsubishi assembly plant in Normal, Illinois. The facility has a production capacity of about 250,000 vehicles — or platforms — annually, according to Scaringe. Rivian itself is hoping to sell between 70,000 and 80,000 of its R1T and R1S models annually, and it is working up additional products that could eat up even more of that capacity. Rivian is also developing vehicles for Amazon. It announced a separate, $700 million investment deal in February with a consortium led by the online retailer. Specific plans have not been revealed, but the electric car maker is believed to be working on some sort of delivery truck for Amazon, said Sam Abuelsamid, an analyst at Navigant Research. And they could use autonomous driving technology developed by two self-driving start-ups Amazon has also invested in. Rivian will use its Normal plant to produce the platforms Ford plans to use. They will then be shipped to a Ford assembly plant for the rest of the assembly process — though the Detroit automaker did not offer further details. But the number of skateboard vehicle frames available to Ford could be limited unless Rivian expands capacity or lets Ford produce them elsewhere, analysts said. Rivian Even if Ford only can produce a limited number of vehicles using the Rivian technology, the deal could prove to be a sound investment, Brinley said. Both companies plan to share intellectual property, and Rivian could help Ford learn how to speed up its own EV developments. In turn, Ford could teach its new partner a lot about mass production. The deal could also pay off handsomely if Rivian becomes a success, Ford standing to share in some of its future profits. Then, said Brinley, Ford also could wind up making a handsome return on its investment sometime down the road if Rivian were to go public. Both Daimler and Toyota generated significant profits on their early investments in Tesla, she noted. And General Motors stands to be well rewarded if it eventually sells off its stake in ride-hailing service Lyft, which staged its own IPO in March. Rivian CEO Scaringe also said he could be interested in acquiring some of the self-driving vehicle technology being developed by Ford's artificial intelligence subsidiary Argo AI at some later date. The deal does have a potential downside, however. Rivian has yet to actually sell any vehicles using its technology. And the market for plug-based vehicles remains small. BEVs, in particular, accounted for barely 1% of the U.S. market in 2018. But demand doubled in the U.S. and is growing even faster in China, now the world's largest market for zero-emissions vehicles.<doc-sep>Ford Motor Co., maker of the best-selling F-Series pickup, announced early Wednesday that it is investing $500 million in Rivian, the Michigan-based electric truck startup company. “Rivian and Ford match up strategically,” said Ford CEO Jim Hackett. “We can learn a lot from each other.” The match is viewed by analysts as a coup because the company headquartered in Plymouth rebuffed a restrictive arrangement with General Motors, according to Bloomberg. Rivian is a rising darling of the tech and automotive industries as vehicle manufacturers shift toward electrification and consider electric pickups. The company has the backing of Amazon, the Seattle-based multinational e-commerce marketplace that also specializes in cloud computing and artificial intelligence. Ford and Rivian have agreed to work together to develop an "all-new, next-generation battery electric vehicle for Ford’s growing EV (electric vehicle) portfolio using Rivian’s skateboard platform," Ford said in its statement. “This strategic partnership marks another key milestone in our drive to accelerate the transition to sustainable mobility,” RJ Scaringe, Rivian founder and CEO, said in prepared remarks. “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.” Later, Scaringe emphasized the importance of Bill Ford’s history “as really one of the early leaders in electrification and sustainability for transportation” who has been driving the issues before they became popular. That’s meant a lot to us and a lot to me.” Ford, executive chairman of the company founded by his great-grandfather, said in the statement: “We are excited to invest in and partner with Rivian. I have gotten to know and respect RJ, and we share a common goal to create a sustainable future for our industry through innovation.” Hackett also praised the 36-year-old CEO of Rivian, who earned a PhD from the Massachusetts Institute of Technology, saying, "I see a bit of myself in this entrepreneur. Bill felt the same way." While Ford intends to develop a new vehicle using Rivian’s flexible skateboard platform, this is in addition to Ford’s plans to develop a portfolio of all-electric vehicles. As part of its previously announced $11 billion EV investment, Ford already has confirmed two key fully electric vehicles: a Mustang-inspired crossover coming in 2020 and a zero-emissions version of the best-selling F-150 pickup, the company said. Ford executives declined to provide details about which type of vehicle will be produced as a result of the partnership with Rivian or when such a vehicle will arrive in the marketplace. “We have a lot of experience in electrification, but there’s a lot we don’t know and also things we can still learn,” said Joe Hinrichs, Ford’s president of global operations, who noted the automaker is celebrating its 116th year. 'Different flavors' Hackett added, "Bill and I have been really clear about our march toward a CO2-neutral world. Ford doesn’t have to go all electric for that to work. The customers want choice. This is a key component in completing the portfolio for us.” Rivian will remain a competitor and build trucks on its own, but executives from both companies indicated there is potential to cut expenses in areas such as sourcing parts and materials. "We do see significant opportunity, both in terms of cost and in terms of speed, an opportunity to go faster," Hinrichs said. Ford officials declined to provide specifics on financials. The partnership will result in a vehicle that wears the Ford badge, Hinrichs noted. "We’re not discussing today where our vehicle will be manufactured or how we’ll manufacture it," he said, noting that the first application will be in North America. "We’re not disclosing today what brand, what product, what segment," Hinrichs emphasized when pressed for detail from the investor community on a call about the partnership. Ford’s massive manufacturing operation won praise from the Rivian CEO, who left open the door on potential partnerships with others in the future. In referring to the "premium or aspirational space" with regard to electrification, a zone dominated by Elon Musk and Tesla until now, Scaringe said, "I feel it's really important that customers have multiple options — different flavors." Rivian has been involved in discussion for about a year, he said, talking with potential partners and trying to find "alignment." Scaringe said he was not able to disclose details of the talks or identify the companies involved. Playing the field Partnerships and alliances are how the transportation system is evolving, Hinrichs said. "We can learn from each other and compete with each other at the same time.” Scaringe explained, "We have a very deep respect of what the auto industry is capable of today — over 90 million cars a year without breaking a sweat." That expertise is essential to the future of Rivian, which is focused on expanding its operations independently. "There is a lot to learn from companies like Ford," Scaringe said. The automaker's $500 million investment goes into Rivian; it is not earmarked for a specific Ford project, he said. And the Amazon relationship, which brought another $700 million investment, is "entirely separate," with details not yet discussed or disclosed publicly. Meanwhile, Ford's latest alliance "does not interfere" with ongoing talks involving Volkswagen and additional partnership there, Hackett said. "This helps us in areas we weren't considering with others." 'Tesla killer' Tesla is considered a key competitor on these upcoming projects. Prior to the public announcement, Ford briefed analysts in North America. “This investment by Ford in Rivian makes tremendous sense for increasing the number of options it has for future electric vehicles between its existing current programs and the addition of Rivian’s electrification platform," said market analyst Jon Gabrielsen, who advises auto manufacturers and parts suppliers. "At this early stage of market entry with some initial all electric vehicles, it is difficult to know which technological approaches will turn out to be best and how many resources Ford will need to do the development — depending upon the rate that the consumers embrace them.<doc-sep>
Enlarge Image Rivian Ford will invest $500 million in electric-car startup Rivian, the companies announced Wednesday, forming a strategic partnership. As part of the deal, the companies will develop an "all-new, next-generation" electric vehicle for Ford, based on Rivian's "skateboard" EV platform. Rivian has so far shown the R1T electric pickup truck and R1S electric SUV, which the automaker hopes to put into production from fall 2020. Both models are built on the company's platform, which looks like a big skateboard and houses the vehicles' batteries, motors and all control electronics, allowing for different types of vehicle bodies to be mounted on top. Ford didn't say what type of vehicle it plans to build with Rivian's platform, noting only that the new model will be in addition to Ford's existing EV plans. The automaker has announced an electric crossover due in 2020 and an all-electric F-150 pickup truck -- both of which are already under development. For its part, Ford previously announced plans to invest $11 billion in developing its range of electric cars. Enlarge Image Rivian "Ford has a long-standing commitment to sustainability, with [executive chairman] 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," Rivian founder and CEO RJ Scaringe said in a statement. Under the terms of the deal, Rivian will remain an independent company, though Ford President of Automotive Joe Hinrichs will join Rivian's seven-member board. The companies said the investment is still subject to regulatory approval. Rivian previously received investments from Amazon, and was at one time rumored to be considering a partnership with General Motors. Rivian has its headquarters in Plymouth, Michigan, with other engineering facilities in California. The company purchased a 2.6-million square-foot former Mitsubishi plant in Normal, Illinois, which it is refitting to manufacture its R1S and R1T models.