Ford Motor Company is investing US$500 million in Rivian, an electric vehicle (EV) developer which is considered to be a potential future rival to Tesla.
Ford, one of Detroit's Big Three, and Rivian announced on Wednesday an equity investment of US$500 million from Ford in Rivian, forming a strategic partnership.
Rivian will remain an independent company after Ford's investment, which is subject to customary regulatory approval. Following the investment, Joe Hinrichs, Ford's president of Automotive, will join Rivian's seven-member board.
Apart from Ford's investment, the companies have agreed to work together to develop an all-new, next-generation battery electric vehicle for Ford's growing EV portfolio using Rivian's skateboard platform.
This new vehicle comes on top of Ford's plans to develop a portfolio of battery electric vehicles.
Ford has already announced it would invest US$11 billion in EVs. As part of that multi-billion investment, the company has confirmed it would roll out two key fully electric vehicles: a crossover inspired by the Mustang in 2020 and a zero-emissions version of the best-selling F-150 pickup.
"As we continue in our transformation of Ford with new forms of intelligent vehicles and propulsion, this partnership with Rivian brings a fresh approach to both," Jim Hackett, Ford president and CEO, said in a statement.
"At the same time, we believe Rivian can benefit from Ford's industrial expertise and resources," Hackett noted.
"Ford has a long-standing commitment to sustainability, with Bill Ford being one of the industry's earliest advocates, and we are excited to use our technology to get more electric vehicles on the road," said RJ Scaringe, Rivian founder and CEO.
Rivian, whose target group is adventurers, has developed two clean-sheet vehicles: the five-passenger R1T pickup and the seven-passenger R1S SUV. Rivian plans to launch both vehicles in the U.S. in late 2020, and to start adding other countries beginning in 2021.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More