Ford Tuesday plunked down a little cash, about 1 percent of the company’s total value, to buy into Rivian, a promising Michigan-based developer of electric pickup trucks and luxury SUVs. This gives Ford instant credibility — at least more than it had lately — in the Tesla upper-crust strata of electric vehicles. Rivian on its own had been shooting to have its new vehicles out in late 2020.
The $500 million buy-in gives Ford the right to use Rivian’s chassis to create a new Ford vehicle. Ford has been an early proponent of electrification, but it hasn’t kept up with competitors in pure EVs or in plug-in hybrids that go 10 to 50 miles on electricity before the combustion engine takes over. Amazon already has $700 million invested in Rivian. The Ford deal comes in just after GM and Rivian broke off talks; GM wanted a monogamous relationship and Rivian has other plans.
Even before the Ford-Rivian hookup, Ford had said it would electrify the Ford F-150 pickup, the best-selling vehicle in the US (more than 800,000 sales last year). In an investor meeting after January’s Detroit auto show, Ford’s sales and marketing VP Jim Farley said, “We’re going to be electrifying the F-Series—battery electric and hybrid.” (And continue building gasoline and diesel F-150s.) The new, unspecified Ford electric vehicle will take Rivian’s skateboard design, meaning the drivetrain and batteries on a low-lying module; then the passenger compartment goes atop that. Ford will do the vehicle design and production.
Separately, Rivian has used the chassis of F-150 trucks as early development mules to test the batteries and motors. That appears to be apart from what Ford will be doing to electrify the F-150.
Rivian is considered a “normal” company by US automakers. Translation: The company, founded in 2009, is in Michigan, with headquarters in Plymouth. Many of its employees have worked at the Big Three automakers, including people who know how a production line is supposed to be run — disregarding that founder RJ Scaringe grew up in Florida and went to Rensselaer and MIT rather than Michigan or Purdue. Rivian also has operations in Irvine and San Jose, CA, in Normal, IL (production site).
Since last year, Rivian has been showing concepts of its two initial products: the R1T “electric adventure” pickup truck, and seven-passenger R1S SUV. They’re full-size vehicles. Depending on the size of the battery pack, they could travel up to 400 miles. That’s important because a pickup is more of a suburban or rural vehicle, driven far from public charging stations.
Ford Motor Company’s current involvement in electrification — if you measure by vehicles available for sale — is soft in 2019. Just three of the 43 EVs or PHEV models sold last year were Fords. The new, 2020 midsize Lincoln Aviator SUV will get a plug-in hybrid version, though it’s not listed on the company’s current build-to-order worksheets. The compact Ford Escape SUV and its sibling Lincoln Corsair will offer plug-in variants. Ford also builds a hybrid Ford Fusion, though the Fusion is going out of production. One of Ford’s broad problems is it sells really good sedans, particularly the Fusion, that buyers aren’t buying. GM has the same problem. Both get beyond the issue by selling more than a half-million pickup trucks a year.
Ford found common ground to work with Rivian where GM couldn’t. Rivian plans to be both a developer of its own vehicles and a technology supplier to other automakers. Porsche for years made more money doing design and consulting work for others than it made selling its own vehicles. Rivian’s rules for a deal were twofold: Don’t compete directly with the vehicles we’re developing (six by 2025, Rivian says) and don’t tell us we can only do business with you. GM wanted monogamy and walked. Ford struck a deal.
The big challenge for Ford — as it is for every automaker — is the current demand for electrified pickup trucks. Rounded up to the nearest integer, it’s zero.
That could well change with higher fuel prices, a long-term shortage of hydrocarbon fuel, or more likely, growing concerns about climate change. Selling electrified SUVs is less of a hassle. And the same goes for plug-in hybrid pickups and SUVs. EV purists scoff at plug-in hybrids. But in the interim, until EV chargers are at all 200,000 of the nation’s gas stations, plug-ins make sense, too. Rivian can help with the EV part. Ford will have to do the PHEV part on its own.