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Monday, 22 November 2021 18:29

Ford, Rivian Abandon Joint EV Development Plans

Written by Mark Kane, Inside EVs

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Ford ditched plans to jointly develop electric vehicles with Rivian, and both companies will focus on their own EV projects.

Ford invested some $500 million in Rivian in 2019---later increasing the amount to $1.2 billion---but in the end, the two companies will not introduce a jointly developed EV.

 

By the way, shortly after its IPO, Rivian had a market cap almost 50% higher than Ford.

 

First, the companies decided in April 2020 the Rivian-based Lincoln was canceled. And now, it's official Ford will not use Rivian's EV tech either.

 

According to Automotive News, Ford CEO Jim Farley set a new direction to make the company a high-volume BEV manufacturer---600,000 per year globally and No. 2 in the U.S. by the end of 2023---and does not need Rivian to achieve that.

 

"Right now, we have growing confidence in our ability to win in the electric space," Farley said in an interview Nov. 18. "When you compare today with when we originally made that investment, so much has changed: about our ability, about the brand's direction in both cases, and now it's more certain to us what we have to do. We want to invest in Rivian---we love their future as a company---but at this point we're going to develop our own vehicles."

 

Well, it sounds totally rational if the company is going all-electric to focus on its own vehicles, architectures and solutions. Outsourcing is usually a cost-reduction approach when a company is not going full-scale. The complexity of using an external platform/architecture is too high compared to in-house solutions for the mass market.

 

Electrification is a big change for Ford---maybe the biggest since the Model T. And who knows, maybe we will even see an all-electric Model T?

 

"As a leader of Ford I get really excited, because there hasn't been a chance to transform Ford and create this much value since...


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