An industry giant in affordable vehicles and a promising upstart in premium electric vehicles form an important partnership.
Ford is a global leader in automobile production with as much experience in efficient manufacturing as any company in the business. Rivian is an exciting new startup company with MIT-educated genius RJ Scaringe at the wheel. Could this be the match made in heaven that EV-advocates have long hoped for?
Rivian has developed a “skateboard” style platform for its two EV prototypes, the five-passenger R1T pickup, and seven-passenger R1S SUV. Both are high-end in terms of price point and performance. While we enthusiasts all love to read about and dream about such vehicles, they sell in very small numbers relative to the Ford F-150s and Toyota Highlanders most Americans drive. Ford is the leading expert in mass-production, affordable vehicles for the masses. And has been since Henry Ford pioneered that industry. A marriage between two such opposite companies can produce lasting benefits for both. If they can get along.
Tesla tried this with Toyota. The two worked collaboratively on an electric RAV4. The world’s first EV crossover was a limited success in terms of execution, but not in terms of volume sold. The partnership dissolved after this first effort and the two no longer work together. Tesla walked away with an abandoned manufacturing facility in the world’s most expensive labor market and Toyota walked away with a chunk of Tesla stock it sold at a massive profit. Both think they got a great deal.
Ford’s investment is substantial. A cool half-billion U.S. dollars in minority ownership of Rivian. Ford also gets to place its President of Automotive, Joe Hinrichs, on Rivian’s seven-member board of directors. “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,” said Jim Hackett, Ford president and CEO. “At the same time, we believe Rivian can benefit from Ford’s industrial expertise and resources.”
Those who have been watching Ford’s electric vehicle progress so far know that the company’s first few models like the C-Max and Fusion Energi sold relatively well at first, but flamed out in the market. Ford isn’t bothered. Those were just the company’s first of the new generation of EVs it is working on. Ford currently has an electric F-150 in development along with a “Mustang-inspired” electric performance car. Ford confirmed today that those are going full steam ahead and that its Rivian-derived vehicle is in addition to those key models.
For its part, Rivian seems to have its priorities right as well. “This strategic partnership marks another key milestone in our drive to accelerate the transition to sustainable mobility,” said RJ 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.”
Tesla’s most difficult challenge to date has not been technology or funding, or an enthusiastic market to buy its vehicles. Rather, manufacturing delays, called by Elon Musk “production hell” on more than one occasion, have been the leading EV company’s primary challenge. Tesla also has trouble with deliveries. Had Tesla partnered early on and in a meaningful way with GM, VW, Toyota, or Ford, production and delivery would not have been a problem for Tesla. Here, Rivian isn’t just learning from Ford and vice-versa, they also have a previous collaboration between an EV startup and mainstream car company they can look back on and learn from.