Ford's investment in electric truck maker Rivian was possible after the start-up's talks with GM broke down about eight weeks ago.
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 a senior executive at Rivian.
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.
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. 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.
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 with Navigant Research. And they could use autonomous driving technology developed by two self-driving start-ups Amazon has also invested in.
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 AG and Toyota generated significant profits on their early investments in Tesla, she noted.
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