Rivian gets $500M investment from Ford

In reply to Ian F :

Exactly. 

Carguy, your response is akin to someone posting about a new sports car and someone saying "bah, it can't fit my family". 

I'm trying to think just how rural and what situations exist that this wouldn't work. There are very, very few--I'm coming up with those who drive over 200 miles a day with regularity and those who have knob and tube electric at their home. And even in those situations there are more and more charging stations popping up every day:  https://www.plugshare.com/. It won't be too long before they're like gas stations. 

Obviously there are situations that they won't work, but they're very few and much farther in between. Even for those who use them as "real trucks". 

EDIT: And that isn't to say that it is "right" for one even if it would work. I still like a V8 powering the wheels in the back. But this is really an awesome area that the auto industry is heading towards.

The same arguments come up in every EV thread - a variation of “it won’t work in this particular instance so it’s E36 M3.”  

Guess what - no car does everything well. They are all compromises.

Having grown up in Texas I can tell you that at least 75% of the trucks sold there are not near any fields and are unlikely to ever see anything besides a paved road. And they all get the high margin options like leather interiors and chrome this and that. 

I own a HVAC/sheet metal business that does its business within a 30 mile radius. A fleet of electric trucks and vans sounds very good. However....

I buy my vehicles with very low miles from the rental companies. All in, equipped with racks, shelving units, alarm, and GPS tracking, I'm still under $30K. Paying twice that much for electric doesn't make economic sense. 

I work in a technology company that does construction.  My office has a ton of both Telsas and trucks.  I could see an EV truck in our parking lot within the 1st month of them being out.  

New stuff gets eaten up out here in Scottsdale AZ.  A truck plus HOV pass for being electric?  Slam dunk.  Only thing that would be hotter would be a Navigator or Escalade.  

Ford confirmed hybrid and fully electric versions of the F150 back in January. So this may not impact that, at least initially.

And after the Rivian news came out, one of their primary spokespeople (Mike Levine) had this to say on his personal twitter:

So it seems like the plan is not to throw this under the F150 as much as it's to use the Rivian stuff for something else, like a bunch of new CUV/SUV things.

Just one post from me here...

Two problems with this investment. 

It tells employees (again) that the work they have been doing under the direct instruction of the same management who authorized this sale that they are not doing a good job.  Not great for morale.  And 90% of project failures or shortcomings are because of odd management decisions- not the team doing the work.  So it's hard to deal with "here work on this- no you suck, we are going to spend 10x that to buy it from someone else".  

And it also takes away money from projects that could be happening.  Given it's a corporation, its likely that the people in the above situation were underfunded, probably with a fraction of the money spent given to them to do this job.  Let alone the rest of the company who should be spending that money on the products that are coming out.

Seems like most of you think OEMs are not working on EVs of any type, let alone trucks and SUV/CUVs.  That's not accurate at all.

In reply to alfadriver :

Or it could be a preemptive purchase: invest/make a deal with Rivian so another brand - say FCA? - doesn't first.  I would suspect GM already has similar products deep in development. 

In reply to alfadriver :

I appreciate your unique perspective and understand why that will be your only post here. But from an outsider's perspective, it seems like the investment is either a way for them to catch up (admitting that Rivian's product was closer to market than Ford's), a way for them to get a product that fills a gap in their lineup (not that EVs aren't in development, but a fully dedicated EV "skateboard" style platform that allows more design freedom/space utilization than a modified ICE platform), or a way to acquire the tech more cheaply/efficiently than developing it themselves (keeping MSRP price competitive, freeing up development engineers to do less redundant work, etc).

After this came up I went back and rewatched the design tour of the Rivian truck that Jalop did (Yeah, I know.)  I think the design and packaging on their truck is one of the things that excites me most about it. I know that there will be trucks capable of doing what I want in an EV format at some point, probably in the next 6-10 years. I further suspect that in 10 years every (surviving) manufacturer will offer as many EV models as ICE in their lineup. The thing that's cool about the R1T is all the cubbies, storage, and such that are possible because it does start with a blank slate that's not restricted by current ICE design.

But most of the stuff could be offered in an ICE vehicle as options too if the engineering is done on it. The front trunk and full with bin between the bed and rear seat are really cool, particularly the cubby doors that double as seats/steps to load the bed. You'll never get those on an ICE truck due to drivetrain placement. How about the roof load bars that unsnap and can be placed across the bed as well? The integrated hard tonneau is a winner wether or not it's power. The 90* drop tailgate could be cool and we're already seeing similar stuff from GM. The integrated security cable in the bed would be perfect for locking down my mountain bikes, and the fact that it pings your phone if it's cut is pretty cool. It also has a built in air compressor so I can top up the bike tires. Rechargeable flashlights that pop out of the rear door jambs. I mean - this is some cool stuff that I could use on a weekly basis for what I really use a truck for. All of it could be done on a gas truck, but let's say Ford put it all on an "adventure" trim F-150...what would that bad boy sticker for? I'm betting it would be all over the $70k that Rivian is quoting (however optimistic THAT is) or more.

Now, I suspect that by the time you option up to the big batteries, towing setup, etc, there's still going to be a $15k-$20k spread between comparably capable vehicles, and that's a lot. If some of those really useful features are built in to the EV and I have to upfit them to the gas truck myself....that starts to offset the spread quickly. A good hard tonneau cover is $2k easy. Add onboard air and cargo management and you're in for $5k++ already.

I guess my point is that the EV execution on the trucks is the big news, but certainly not the only thing that makes them very attractive to me. At least when they crack the towing problem. Gas trucks still make more sense for certain applications and will for a long time to come, but EVs are getting better every day.

STM317 said:

In reply to alfadriver :

I appreciate your unique perspective and understand why that will be your only post here. But from an outsider's perspective, it seems like the investment is either a way for them to catch up (admitting that Rivian's product was closer to market than Ford's), a way for them to get a product that fills a gap in their lineup (not that EVs aren't in development, but a fully dedicated EV "skateboard" style platform that allows more design freedom/space utilization than a modified ICE platform), or a way to acquire the tech more cheaply/efficiently than developing it themselves (keeping MSRP price competitive, freeing up development engineers to do less redundant work, etc).

Yeah, I get where Alfa's coming from but I suspect that Ford's internal engineering is working to solve a much harder problem than Rivian is. Ford needs to engineer a platform that is good as BOTH and EV and ICE. that's a lot harder than a blank slate EV. I also think that the Ford investment is much more about business issues than engineering issues but the fall out effects alfa mentions are the real result.

What do I know though, it's always easy to drive the course when you're sitting in the stands.

In between the “trucks have to drive 600 miles every day with a full load” and “trucks are only being used as big cars” stereotypes lives the actual truth. Around here, trucks get used to do stuff. Many of them have a company name on the side and are running around construction sites, lawn care appointments, oil fields, etc within a relatively small radius. These are the ones that could be EVs quite easily, with the potential for high torque, low running costs and very simple mechanicals.

Heck, even being used in the back fields isn’t a big deal if you’re smart enough to pay attention to how much energy you have left. My father-in-law’s old farm truck has a stupendously thirsty 460 in it and it has yet to need a jetty can delivery of fuel. 

I think the ICE option will always remain for those that need to put down big miles. Maybe the thing to do is to rent something appropriate for the one or two times a year you need that ability. I’m seriously considering a Tesla Model 3 as the replacement for our old Grand Cherokee because it will do a better job 99% of the time and costs considerably less to buy and own than most alternatives we’ve looked at - and I know my wife will dig the torque. For the times we would need to go beyond it’s normal range, renting an ICE is a plausible option. Trucks are no different. 

STM317 said:

In reply to alfadriver :

I appreciate your unique perspective and understand why that will be your only post here. But from an outsider's perspective, it seems like the investment is either a way for them to catch up (admitting that Rivian's product was closer to market than Ford's), a way for them to get a product that fills a gap in their lineup (not that EVs aren't in development, but a fully dedicated EV "skateboard" style platform that allows more design freedom/space utilization than a modified ICE platform), or a way to acquire the tech more cheaply/efficiently than developing it themselves (keeping MSRP price competitive, freeing up development engineers to do less redundant work, etc).

You missed one... buying market share. 

Ford is currently selling trucks at the $70K price point.  The truck  Rivian is offering would be at the same price point, with significantly different features. It will appeal to a different market segment, which Ford wants. 

I understand Alfa’s morale concerns. But Ford is not just in the design business- they are in the market share business, and sometimes this is an expense that must be made. 

I would not view this as an over expenditure on design. On would view it as an investment in market share which parallels there own design efforts, and reinforces their commitment to the EV market. 

In reply to alfadriver :

I honestly thought Ford had been working on its own skateboard platform for a while. Rivan is hardly the first one to advocate the platform as I remember seeing them as far back as the early 2000's in Popular Science (right around the same time that Honda was advocating a hybrid car with electric motors in each wheel that ultimately became the NSX.)

I don't have any internal knowledge of Ford but my understanding from some news outlets is that the F-150 was being reworked to accept either an ICE or EV powerplant. While it's extremely advantageous from a production prospective, there's likely lot of compromises associated with that type of design compared to a vehicle designed to be an EV from the ground up. This also has the effect of locking some of Fords competitors out of that technology. It's not that Ford couldn't produce their own, they've certainly shown the ability to in the past, but why bother if you can lease the tech for a fraction of the cost?

One more post- you guys are hung up on Rivian's pick up.  That's not the point of the investment.  The "rollerskate" was.  At least the news I'm reading- nothing is really mentioned about their pick up.

Also, we are in the money making business, not the market share business- that path didn't work 20 years ago.  So a $70k gas truck will not be the same as a $70k E-Truck, as the E-truck can't be sold at a loss.

What's it going to cost?  Who cares...I see people daily drive Dually F-350s that cost north of $75,000. The number of Raptors that never ever leave pavement is about 94%. Any decent truck these days will set you back $50k+. Ford can't make the F150 fast enough, seven more variations would sell regardless of price point.   

In reply to alfadriver :

Having worked at a large company (tho not in auto), a "venture" side of the same company, and smaller companies, I can say that most big companies definitely move slower.  It's bureaucratic because they're giant moving ships - John Doe can't decide by himself to made a change to product formulation without checking with marketing, sales, finance, production, supply chain, procurement, etc., and even after checking, they have to run it up the chain to get it approved.  Those processes are set up for a reason because without those checks things get berkeleyed up quickly.  Now, the downside of that is the orgs are not nimble, and over time folks who want more freedom or be entrepreneurial self select out and go work at a Rivian.  So I absolutely agree with you the diagnoses because I've seen it with my own eyes, but I would not bet that the same money would produce the same or better outcome internally (not impossible, but far far from certain).  

Think of another example - Tesla is now worth somewhere near the value of the large OEMs yet they were able to do it with much less resources than any of the large OEMs.  I'm sure somebody at these large OEMs considered making an investment at some point over the past ten years, but they didnt, and I bet now they wish they had...

alfadriver said:

A $70k gas truck will not be the same as a $70k E-Truck, as the E-truck can't be sold at a loss.

Yep. Rivian's price point is conjecture mixed with marketing. When's that $35K Tesla comin, anyway?

The “market share business” business stopped working 20 years ago??

Better tell Amazon. 

Where are Rivian's test & engineering center/centers?  Asking for a friend...

Hmm.  I know Ford inside and out.  Rivian are getting $500m in Ford money.  They just moved way way up my job search and resume list!!!!

Adrian_Thompson said:

Hmm.  I know Ford inside and out.  Rivian are getting $500m in Ford money.  They just moved way way up my job search and resume list!!!!

BloNo is not a bad place to live. A little boring, very white-bread with little to no diversity, but not a bad place to live at all. 

In reply to SVreX :

For the car business it did.  Back when Ford, Toyota and Honda were all chasing the "best selling sedan in the US" title, even if it meant selling cars at a loss. Eventually, they realized it proved unsustainable. Replaced by the "sell what you can and make sure it's profitable" concept.

Some of the fairly conservative financial newsletters I subscribe to are very negative on Amazon for this reason. 

Kreb said:

alfadriver said:

A $70k gas truck will not be the same as a $70k E-Truck, as the E-truck can't be sold at a loss.

Yep. Rivian's price point is conjecture mixed with marketing. When's that $35K Tesla comin, anyway?

The $35k Tesla is here. Especially if you take inflation into account.

Small data point: on my way in to work this morning, 5 of the first 6 trucks I saw were working trucks based on the bed toolboxes, ladder racks, roof lights and the like. The other was a Ridgeline. I stopped counting at that point because traffic got heavy enough that my time was better spent driving. And that doesn't include the truck I was driving, which was full of tires and wheels and a spare dashboard.

alfadriver said:

One more post- you guys are hung up on Rivian's pick up.  That's not the point of the investment.  The "rollerskate" was.  At least the news I'm reading- nothing is really mentioned about their pick up.

 

Exactly.  Rivian has nothing to do with the F-150 EV which is already in development, and they've stated as such.  

Often the cheapest way for a company to do R&D is to buy another firm that's already done the homework.  

If Rivian has the tech, and clearly they've teased enough of the goods that Ford (and GM for that matter) was willing to jump in with them, then it can make a lot of sense to buy that capability.  The "skateboard" developed can underpin the CUV onslaught that is underway, and this may be a more cost effective way to do it, plus the technology leg up trickles to other divisions and development as well.  

xflowgolf said:

alfadriver said:

One more post- you guys are hung up on Rivian's pick up.  That's not the point of the investment.  The "rollerskate" was.  At least the news I'm reading- nothing is really mentioned about their pick up.

 

Exactly.  Rivian has nothing to do with the F-150 EV which is already in development, and they've stated as such.  

Often the cheapest way for a company to do R&D is to buy another firm that's already done the homework.  

If Rivian has the tech, and clearly they've teased enough of the goods that Ford (and GM for that matter) was willing to jump in with them, then it can make a lot of sense to buy that capability.  The "skateboard" developed can underpin the CUV onslaught that is underway, and this may be a more cost effective way to do it, plus the technology leg up trickles to other divisions and development as well.  

This is correct. 

Look at the number of companies purchased per year by Tech giants like Oracle, Google, Facebook, Amazon, Apple, etc.