Ford Motor Company and its luxury segment Lincoln Motor Company have announced the shelving of their plans to build a new electric vehicle (EV) with Michigan-based EV startup Rivian – a decision forced by the current financial and healthcare environment. Though the reasons were not spelled out, it can be inferred that the ongoing COVID-19 crisis was a primary reason for the halt.
However, the companies are optimistic and plan to co-develop a vehicle in the future. “Our strategic commitment to Lincoln, Rivian and electrification remains unchanged and Lincoln’s future plans will include an all-electric vehicle consistent with its Quiet Flight DNA,” said Lincoln’s spokesperson in a statement.
Rivian was one of the earliest startups within the EV segment, initially founded with the goal of building an EV sports car to rival Tesla, Inc. (NASDAQ: TSLA) Roadster.
In 2019, Rivian had investments pouring in from all quarters, starting with a $700 million funding round led by Amazon.com, Inc. (Nasdaq: AMZN) in February. Amazon followed that up with a massive order of 100,000 EV delivery vehicles from Rivian in September, in line with the ecommerce giant’s initiative to become carbon neutral by 2040. Ford had also shown considerable interest in Rivian, investing $500 million into the startup barely two months after Amazon’s investment.
Rivian closed two more funding rounds in the tail end of 2019, with $350 million in equity investment from automotive services company Cox Automotive and a $1.3 billion investment led by mutual funds company T. Rowe Price with repeat participation from Amazon and Ford.
For Ford, Rivian’s allure rested in the startup’s skateboard platform that Ford looked to leverage in building a new EV model. The investment in Rivian was part of its $11 billion investment in the EV segment.
However, Ford kept details on how the partnership would play out under wraps until earlier this year when Lincoln announced that Rivian would manufacture the EV. Though the now-announced termination is a setback, Ford looks to continue building its EV in-house with Lincoln.
“This was a decision that was mutually made by Lincoln and Rivian given the rapidly changing environment and after a review of product plans. As we moved through the development cycle, we determined that it would be better to pivot from the Rivian’s skateboard platform and focus our development efforts on Lincoln’s own fully electric vehicle,” said Lincoln’s spokesperson.
However, Ford has maintained that its partnership with Rivian will stay intact. “Our strategic commitment remains unchanged and the company continues to work with Rivian on an alternative vehicle based on Rivian’s skateboard platform,” said the company.
Lincoln has developed two plug-in hybrid vehicles – the Aviator and Corsair Grand Touring, which was unveiled at the Los Angeles Auto Show. It is to be noted that Lincoln has not developed any fully electric vehicle to date.
— Yahoo Finance