Ford is investing $500 million in electric vehicle startup Rivian, in a move that will help the legacy automaker speed up its efforts to roll out electric vehicles in a cost efficient manner.
As part of the investment, Ford will develop a new electric vehicle using Rivian’s flexible skateboard platform, according to the company’s press release. This is in addition to Ford’s previous announcement that it would spend $11 billion to develop electric vehicles.
Ford’s investment underscores the pressure that old school automakers are under to develop electric vehicle technology. Companies like Ford, GM and Volkswagen are rushing to compete with Tesla, which has already scooped up the majority of the market. Tesla accounted for 80% of all electric vehicle sales in the US in 2018.
Indeed, GM announced a partnership in January with three US charging networks to ramp up its charging capability for its electric vehicle customers. Ford and Volkswagen also announced in January that they would collaborate on future electric vehicle technology.
Meanwhile, Rivian will likely benefit from Ford’s manufacturing expertise as it looks to start producing electric vehicles at its US factory by 2020. Electric vehicle startups like Tesla have had difficulty scaling up their manufacturing, but Ford’s more than hundred years of expertise should help Rivian avoid that.
As automakers aggressively compete to become major players in the electric vehicle industry, consumers are the ones who will benefit the most. The more investment that goes into refining electric vehicle technology now means lower prices for cars down the road.