Ford's $500M investment in Rivian to yield new electric vehicle

DETROIT -- Ford Motor Co., in another move to shore up its electrification efforts, on Wednesday said it was investing $500 million in electric vehicle startup Rivian and plans to build a battery EV using Rivian's flexible skateboard platform.

The move comes weeks after talks between Rivian and General Motors reportedly broke down. GM reportedly was interested in becoming an equity investor in Rivian, much like Amazon, which led a $700 million investment round in the startup in February.

For Ford, the deal secures another ally to manage costs and development in a hyper-competitive space where it has so far lagged behind much of the competition. While rivals including GM and Tesla have introduced battery-powered vehicles, Ford's first long-range battery EV -- a Mustang-inspired crossover -- won't hit showrooms until 2020. It's also planning a battery-powered F-150 pickup.

Ford is also in discussions with Volkswagen about sharing an EV platform. Ford CEO Jim Hackett on Wednesday said the Rivian investment "does not interfere" with any potential deal with VW. "This is a specific platform that helps us in an area we weren't considering with others," Hackett told reporters on a conference call.

Ford executives declined to say what type of vehicle the company would develop on Rivian's skateboard platform, where it would be built or when it would go on sale. They said it would not be one of the two battery EVs Ford has already announced. Hackett said the Rivian investment was in addition to Ford's $11 billion financial commitment to electrifying its lineup through 2022.

"Ford's investment in Rivian is a smart one," Michelle Krebs, executive analyst at Autotrader, said in a statement. "Rivian leverages Ford's leadership, expertise and massive volume in pickup trucks as well as its vast distribution network. The Amazon investment in the Rivian mix may well give Ford an in with the delivery services, possibly with electric cargo vans."

Rivian, which has shown concept versions of an electric pickup and SUV, will remain an independent company, and the investment is subject to regulatory approval. Joe Hinrichs, Ford's president of automotive, will join Rivian's seven-member board.

Rivian's founder and CEO, RJ Scaringe, said the startup plans a "broad portfolio" of vehicles on its skateboard architecture, some of which might directly compete with Ford's EVs. But he said vehicles it develops with Ford will be distinct, with Rivian focused on higher-priced performance models in the active lifestyle space.

"What we do with Ford will be different than that," Scaringe said.

Scaringe said Rivian could partner with other companies, although its current focus would be on building the relationships with its existing partners.

Hinrichs said the deal allows Ford to save money and speed up the arrival of its upcoming crossover EV, and he left open the possibility that the partnership could broaden beyond one vehicle, saying this was the "first of many pieces of news" he hoped both companies would share.