|F||FORD MOTOR CO.||24.48||-0.71||-2.82%|
Auto manufacturers are rushing to produce new plug-in options as governments across the globe seek to impose tighter regulations on vehicles emissions.
On top of the new vehicle slated to be produced in conjunction with Rivian, Ford has already announced two fully electric models in development: A Mustang-inspired crossover and a new version of the popular F-150 pickup.
The race is leading to new partnerships between other carmakers, part suppliers and startups. Ford CEO Jim Hackett called it "a different world, in terms of what's going to emerge."
“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,” Hackett said in a statement.
Rivian will remain an independent company after the investment, but Joe Hinrichs, Ford's new head of automotive operations, will join its board of directors.
“This strategic partnership marks another key milestone in our drive to accelerate the transition to sustainable mobility,” said Rivian founder and CEO R.J. Scaringe. “We are excited to use our technology to get more electric vehicles on the road."
Rivian previously announced a $700 million investment round led by Amazon, a "very important relationship" for the company as it turns to more customer-facing activity, according to Scaringe.
"Just as important is bringing in an [original equipment manufacturer] partner," he told investors.
Scaringe said the deal with Ford is not exclusive but noted the company is unlikely to pursue any new partnerships in the near future as it seeks to roll out its own all-electric pickup truck.
Ford declined to say where it would produce the joint-venture vehicle, but executives said Rivian would manufacture its "skateboard" frame, which includes a thin base with the battery in the middle of the platform.
In exchange, Ford will provide guidance on scaling manufacturing and other technical expertise.
"We'll look for opportunities that benefit both parties," Hackett said.
Rivian has pursued "multiple development locations" on the West Coast to tap top talent, but the firm was also interested in accessing "the heart of industrial talent" in the Detroit area, Scaringe said.
"There's a lot to learn from that," he told investors.
The deal will not impact Ford's prior partnership with Volkswagen to produce commercial vans and mid-size trucks, as well as investigate whether the two firms can work together to launch new electric and autonomous vehicles.
Ford is in the midst of a major overhaul of its global operations after several quarters of declining earnings. The Dearborn, Michigan-based carmaker previously rolled out its new 2020 Escape, one of several new models that Ford is pinning its turnaround on.
Sales at the company fell 1.6 percent in the three months through March to just over 590,000 units.