Ford Motor has agreed to invest $500 million in Rivian, an electric-car startup that is widely seen as a potential rival to Tesla, Ford announced Wednesday.
Rivian, based in Plymouth, Michigan, plans to begin producing a pickup and an SUV by the end of next year. Both will be powered by battery packs and are designed to be luxury vehicles that could appeal to many of the consumers drawn to Tesla and its upscale models. Retail giant Amazon led a $700 million investment in Rivian in February.
Ford is counting on the partnership to accelerate its efforts to field a range of electric cars and trucks.
“We can learn a lot from Rivian, how quickly they turn around ideas,” Ford’s chairman, William C. Ford Jr., said in an interview. “There’s a great benefit from working with a clean-sheet approach” to electric vehicles.
Ford’s investment reflects a changing dynamic in the auto industry. Traditional automakers like General Motors and Ford have introduced electric vehicles, but Tesla has become the U.S. market leader by far. And some analysts say Waymo, a division of Google’s parent company, Alphabet, has moved to the front in developing autonomous vehicles.
“The traditional auto industry is under a lot of pressure to develop tremendously expensive technology, and the way to do that and make it financially viable is by sharing and working with others,” said Rebecca Lindland, founder of RebeccaDrives.com, a new-car information provider. “The demands of the industry are calling for alliances, and you’re seeing that in Ford and Rivian.”
Rivian, which was founded in 2009 by R.J. Scaringe, an MIT-trained engineer, introduced its truck and SUV in public in November. Rivian’s pickup, the R1T, and its SUV, the R1S, are expected to sell for $68,000 or more. With a full charge, Rivian’s pickup will have a range of 400 miles, the company says.
Scaringe said that Rivian had held talks with a variety of automakers but that he and Ford, long a proponent of zero-emissions vehicles, shared a similar vision about developing sustainable transportation. “We believe the world needs to electrify,” he said.
Rivian plans to make its vehicles at a shut-down auto plant in Normal, Illinois, that it acquired in 2016.