In an incremental commitment to invest $11 billion in electric vehicles, Ford Motor Co. (NYSE: F) on Wednesday announced a $500 million investment in startup truck maker Rivian Automotive. The cash infusion brings with it a seat on Rivian’s seven-member board of directors.
In February, Amazon.com Inc. (NASDAQ: AMZN) led a funding round that raised $700 million for Rivian. Ford’s investment represents the fifth funding round for the startup that had previously raised an estimated $450 million in three earlier rounds of debt financing.
At the time of Amazon’s investment, General Motors Co. (NYSE: GM) also was rumored to be looking at investing in Rivian, but that investment never materialized. GM instead chose the same day to announce that it had launched an electric bicycle for the European market.
Rivian has two vehicles planned for introduction late next year, a five-passenger pickup known as the R1T and a seven-passenger sport utility vehicle called the R1S. Both are said to deliver a range of up to 400-plus miles on a single charge. Both vehicles are expected to boast starting prices at around $68,000.
Ford Executive Chair Bill Ford said, “I have gotten to know and respect [Rivian founder and CEO RJ Scaringe], and we share a common goal to create a sustainable future for our industry through innovation.”
Scaringe commented, “This strategic partnership marks another key milestone in our drive to accelerate the transition to sustainable mobility.”
Ford already has announced plans to build two new fully electric vehicles, a “Mustang-inspired” crossover due in 2020 and a zero-emissions version of its F-150 pickup. Ford expects to develop a third new vehicle using Rivian’s “skateboard” platform. The chassis, pictured below, includes motors, braking, suspension and cooling systems, along with the battery in the middle.
According to a report in February at the Detroit Free Press, Rivian has been testing its skateboard platform using an F-150 body mounted on the frame. Scaringe told the newspaper, “We need something to keep the weather out while we put a lot of miles on our skateboard, so they’re driving around in Detroit right now, too. They’re all over the place, but nobody knows.”
Scaringe also noted that, at the time, Rivian had no “corporate connection” with Ford. The wheelbase of the F-150 just happened to be the right size to fit the skateboard platform. That hardly seems serendipitous, but that’s what he said.
Rivian has purchased a former Mitsubishi plant in Illinois where it will build its vehicles. Deliveries are expected to begin in 2021.
Ford’s investment is subject to regulatory approval. Ford Automotive President Joe Hinrichs will take the company’s seat on Rivian’s board.
Shortly before the opening bell, Ford shares traded down about 0.8% to $9.42, in a 52-week range of $7.41 to $12.15. The consensus 12-month price target on the stock is $9.27.