A few weeks ago, Motoring Weekly wrote an article about the Rivian electric truck and how it would add a new vehicle to a fairly crowded market – although with a unique selling point. One of the interesting underlying messages in that article was that trucks are either petrol or diesel powered – up until the Rivian was announced, there were no hybrids or pure electric trucks on the market. That is now changing.
Ford has pounced on a mistake made by its biggest competitor, General Motors (GM), by investing $500M in Rivian – that is half a billion dollars! GM were sniffing around a recent round of investment lead by Amazon into the new truck maker – that round of money raised $700M. The lack of decision making has given Ford the edge with this technology, something that could have bolstered GM’s Cruise subsidiary who are delivering a similar technology for small cars.
Ford have been struggling with the change of power sources for a few years with limited success in delivering hybrids or pure electric vehicles to the market – or at least the market awareness that they are trying. One area that they did get traction with was the announcement that they were buying the Detroit Grand Central Station to convert into an “innovation hub”. Now the market wants to see action and this investment gives them a boost in getting products to market.
Ford has been working on a full EV crossover that is expected to reach the market late in 2020 and they have been trying to get a battery powered F-150 to market as well. Now both of these projects can be brought to market much quicker by utilising the architecture that Rivian has designed and proven to work in their own two models. The investment effectively pays off Rivian for cannibalising their sales with the electric F-150 clearly going to be a big competitor, however if they can sell more of their kit with different badging, then that will help them in the long run.
Although Ford said that the electric F-150 would still be their own design, it would be crazy to attempt to develop a whole new architecture if you have bought into one. Quietly, you would think that many Rivian components would find their way into that new F-150. in addition to this investment, Ford has been working with a long-term partner, Volkswagen (VW), to share development of other electric vehicles – Ford already use a modular architecture originally developed by VW and the two companies have a long history of sharing architectures, core designs and badge engineering.
Both Rivian and Ford claim that they will be working on new models separately – Rivian suggest that they will take the higher priced market and Ford will have the mid to low price ranges. We see this new investment helping every price segment because higher sales of the architecture will naturally reduce the cost of each component and provide revenues to evolve the technology further, making it smaller or more powerful. Why would you develop two separate model lines when Ford could deploy the architecture in all their vehicles including the high-end Lincoln vehicles? Importantly, Rivian could get even more sales of their technology via VW, so trying to keep the two partners apart seems illogical the more you think about it.
Ford, like other manufacturers, has been accused of misleading the regulators over emissions, so this is also a signal to Governments the world over that they are doing something to change that. At a minimum, this is a good news story for the company.