Ford drops plans for EV with Rivian, showing faith in its own tech
Ford Motor Co.'s decision to scrap plans to develop an electric vehicle with Rivian Automotive Inc. is a sign of the Dearborn automaker's confidence and focus on the electrification race, experts say.
Rivian made a splash last week on Wall Street with the biggest initial public offering of the year, surpassing the market capitalizations of traditional competitors like Ford. But the Dearborn automaker says it has what it needs to develop and compete with its own vehicles to become a global EV leader. It won't need to use Rivian's electric skateboard after all.
"Over a period of time, obviously, Rivian has done some extensive and impressive developments of its technology, and Ford has done likewise," Ford spokesman TR Reid said. "They have a pretty ambitious vehicle out there, and we have two high-volume vehicles and others to follow. As things have evolved, we decided what is best for us and to proceed from there."
Ford offers the all-electric, Mexico-built Mustang Mach-E SUV and the E-Transit commercial van at its Kansas City Assembly Plant in Missouri. It will assemble the electric F-150 Lightning pickup truck in Dearborn. Irvine, California-based Rivian in September began delivering its R1T pickup truck from its plant in Normal, Illinois, where it also will assemble SUVs and delivery vans.
"We've decided it's best to further develop separately," Reid said. "They obviously have got lots of confidence in their platform and rightly so, as they've amassed orders for their first vehicle. We like the direction that the Ford team is headed and the progress it has made. We believe our respective capabilities is the way to go."
It's the second time the Dearborn automaker and the EV startup have shredded developments plans. Citing the COVID-19 pandemic, the companies in April 2020 said they were no longer collaborating on an EV for Ford's Lincoln luxury brand.
"As Ford has scaled its own EV strategy and demand for Rivian vehicles has grown, we’ve mutually decided to focus on our own projects and deliveries," Rivian spokeswoman Miranda Jimenez said in a statement.
Still, the "relationship with Ford is an important part of our journey, and Ford remains an investor and ally on our shared path to an electrified future."
Ford had a 12% stake in Rivian when it went public on Nov. 12, increasing the value of its stake to more than $10 billion at the time — a hefty return on the Blue Oval's investment of more than $820 million into the startup. Rivian shares closed Friday up 65% since then.
"We have been impressed by the work by (Rivian CEO) RJ Scaringe, and the work they are doing since we first made our investment," Reid said. "There will be multiple winners with customers."
Combining technologies from two different companies can be complicated, said Stephanie Brinley, principal autos analyst for the Americas at IHS Markit Ltd. The decision will free engineering resources for both companies to focus on their own products.
"They've decided integrating it would be more complicated than to more forward on their own," Brinley said. "It doesn’t mean anything about Rivian or Ford’s technology, just that they are moving at a different pace and in slightly different directions."
The announcement is a sign of Ford "pounding its chest" just as the winners and losers in the EV race are likely to start taking shape in 2022, said Daniel Ives, analyst for investment firm Wedbush Inc.
"They are doubling down on their organic EV initiatives over the coming years," Ives said. "The more that Ford does under its own hood is more positive in how it is viewed by the Street, and strategically, it is a smart move for Ford. They’ve hedged their bets with various investments, but it really feels like Ford has started to get their sea legs. They have to keep up with (GM CEO) Mary (Barra) and GM as they go in this EV arms race."
Ford joined GM last week in signing a pledge at the United Nations Climate Change Conference for all vehicle sales to be zero-emission by 2040, though GM already had stated its aspiration to stop selling internal combustion engine vehicles by 2035. In May, Ford upped its spending expectations for EV investment through 2025 from $22 billion to $30 billion.
"The technology is moving quickly at Ford, GM and Volkswagen, because they are putting money behind it," Brinley said. "It’s not that traditional automakers aren’t capable, it's just that they have not been investing the money, time and energy. Now this is where they are."
Automotive News first reported the end of the collaboration. Despite the scrapped plans, Ford still intends to double its EV capacity to 600,000 vehicles globally within two years and become the No. 2 EV maker behind Tesla Inc., Reid confirmed.
"That is within the next couple of years, but that would be a point in time," he said. "The goal is to be the bona fide leader in the space. No. 2 is not the ambition."