Ford cancels Lincoln electric vehicle program with Rivian

timf

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It makes more sense for Ford to build a Lincoln variant of the Mustang Mach-E than to build an entirely third party model with Rivian. While it would have been cool to see, I support the decision and think it gives Rivian a better chance to focus on their own products.
 

Coast2Coast

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[email protected] Why not the Rivian SUV instead of the Volvo XC90 BEV? (Is it a BEV or plug-in hybrid?) The R1S will be in production, it will out perform the Volvo in every way imaginable, and it will cost about the same. Is there something about the R1S you don't care for?
 

OldEVGuy

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Yes, Volvo is developing a new XC90 BEV to be available in 2022. I really like the concept of the R1S and their skateboard platform. However, Rivian is marketing to the adventurous demographic. I’m in that group looking for the luxurious, like the Lincoln Aviator. I was looking forward to the Ford/Rivian variant, using Rivian’s skateboard platform.
 

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Barry, doesn't it depend on how you define words like adventurous and luxurious?

Adventurous might be something as mild as being able to drive fire roads that were unattainable before. Plenty of those around. Or, getting down to a beach where you weren't able to go before or to visit an area of a park that was previously unreachable. That's not the sort of adventure that Rivian puts in its videos, but it's adventure nonetheless.

I'd probably include a lot of performance features in your luxury category. Being able to drive at speed on and off road is a luxury, isn't it? And if it looks like leather, feels like leather, and wears like leather, I don't care if it's not real Corinthian leather. That's luxury in my book. Autonomous driving levels 2 and, eventually, 3 are luxury in my book.

I'm not trying to play semantic games. We define what's adventurous and luxurious. What we mean by the terms doesn't have to be what Rivian and Volvo or a lot of other folks mean by the terms. Yes, such statements probably put me outside the mainstream but I'm okay with that.

I'd probably promote Rivians as, "a thinking person's all-purpose vehicle," but that's not as sexy as, "keep the world adventurous forever". But, as I told someone at Rivian, that tag line strikes me as ungrammatical and one of misplaced agency. The world doesn't depend on our actions to be adventurous. Adventure is out there. It's up to us to go out and get it.

My point: adventure and luxury are what we say they are.
 

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I’m a huge fan of R.J. and what he’s doing. He has so many bright, talented people with him, I‘m confident they will be able to produce world class vehicles.

I was really counting on the Rivian based Lincoln as my first choice for my first EV. I guess I’ll move on to Plan B. . . the Volvo XC90 Recharge BEV that’s supposed to be out in 2022. In the mean time, I’ll be watching closely, what Ford does with a BEV for Lincoln.

I hope all of you on this forum enjoy your Rivian. I’ll be watching from the sidelines.

Happy Trails!
Adios Senor.
 

OldEVGuy

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Barry, doesn't it depend on how you define words like adventurous and luxurious?

Adventurous might be something as mild as being able to drive fire roads that were unattainable before. Plenty of those around. Or, getting down to a beach where you weren't able to go before or to visit an area of a park that was previously unreachable. That's not the sort of adventure that Rivian puts in its videos, but it's adventure nonetheless.

I'd probably include a lot of performance features in your luxury category. Being able to drive at speed on and off road is a luxury, isn't it? And if it looks like leather, feels like leather, and wears like leather, I don't care if it's not real Corinthian leather. That's luxury in my book. Autonomous driving levels 2 and, eventually, 3 are luxury in my book.

I'm not trying to play semantic games. We define what's adventurous and luxurious. What we mean by the terms doesn't have to be what Rivian and Volvo or a lot of other folks mean by the terms. Yes, such statements probably put me outside the mainstream but I'm okay with that.

I'd probably promote Rivians as, "a thinking person's all-purpose vehicle," but that's not as sexy as, "keep the world adventurous forever". But, as I told someone at Rivian, that tag line strikes me as ungrammatical and one of misplaced agency. The world doesn't depend on our actions to be adventurous. Adventure is out there. It's up to us to go out and get it.

My point: adventure and luxury are what we say they are.
Mark- You make some very good points! You’ve given me some ideas to ponder and consider. If I were to guess, I’d think you’re a secret Rivian salesperson. If not, you should consider applying for a job. You’re good!

Believe me, I’d much rather support Rivian than Volvo. I really need to reevaluate what I want in an EV. I must say, you’ve gotten my thought processes moving in totally different direction. Maybe my Plan B might be to put a deposit down on an R1S. We’ll see!

I appreciate you’re input and insights. Thanks!
 

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Here's what Autoweek, an industry trade journal, has to say about the cancellation of a Lincoln SUV based on the Rivian skateboard.
https://www.autoweek.com/news/industry-news/a32316758/ford-lincoln-rivian-ev-suv-canceled/

Autoweek goes into some detail on Ford's financial troubles, but it leans towards explaining the cancellation of the Lincoln SUV program on the economic downtown as a result of the COVID-19 pandemic. It also wonders if the public taste for expensive electric SUVs is waning. (That's a strange way of putting it since it's not like BEV SUVs now have a large market share.)

The two points are valid but not interrelated, in my opinion. Ford just lost $5 billion in a quarter. Wow, that's massive! Ford's got to do whatever it can to cut cost and increase sales in the short term. Ford probably wishes it could have its $500 million investment in Rivian back, and it makes little sense to spend several hundred million dollars on rolling out a brand new model, even if an uptick in Lincoln sales is the one bright spot in Ford's recent quarter. (Lincoln has new plug-in hybrid models of the Navigator and Aviator on the way to the market.) The cancellation of a Lincoln BEV SUV seems almost wholly a financial decision (to me).

Autoweek makes a valid point about pricing in an economic downtown. It avers that fancy SUVs selling for more than $50K will find tough going in a post-pandemic world. While auto sales overall will likely fall (they already have), I'm not sure the decline will be disproportionately heavy at the low volume, high price end of the market.

Let's explore Autoweek's assertion a bit. Will a $50K ICE, two wheel drive, three row SUV sell better than a $60K, 105kWH, 4 wheel drive, air suspension SUV? It's possible RJ might be having sleepless nights over this.

But if one options the two wheel drive, ICE SUV to have the same level of equipment as a Rivian, the price difference all but disappears. 4WD is a several thousand upgrade; air suspension is thousands more, if you can get it; a kinetic suspension upgrade is $2-3K, if you can get it; and the beat goes on.

Optioned alike, there's not going to be a lot of difference in pricing between an ICE SUV and a Rivian with the 105kWH battery pack. But if you want the larger battery packs, 135 and 180 kWH, there's probably going to be jumps of about $10K with each battery pack upgrade. So, a $60K ICE SUV versus a $70K, 135 kWH Rivian.

For someone like me who keeps their vehicles until they don't run, a $10K difference in initial cost won't matter. I'll make that up in gas and maintenance savings over 5-10 years and, in the meantime, I'll enjoy the power, performance and comfort of my electric powered vehicle. But if you trade-in every 3-4 years, a $10K difference in initial cost is considerable. Moreover, with advances in battery technology, the cost and performance of battery powered vehicles are likely to be much better in 4-5 years. No use holding onto your 2021-22 Rivian.

To wrap up, Ford's cancellation of a Lincoln BEV SUV program with Rivian is almost entirely financially motivated, in my opinion. It's short term, do whatever you can do now to cut costs and increase revenues.

But the post pandemic auto market will be different. Auto sales will be down, and they likely won't recover to 2019 levels for several years. Discretionary purchases of all sorts will be down. Houses, cars, boats, vacations - you name it. The key question for Rivian, I think, is how quickly should it ramp up production? We know that Rivian expects to produce 20,000 vehicles in its first, full year of production. That's 2021. If Rivian doesn't ramp up to full capacity until the second quarter of 2021, about 15,000 vehicles will be produced in 2021. If full capacity isn't reached until the third quarter, production will be about 10,000 vehicles in 2021.

How many pre-orders are there? We don't know. There's been no official word. We know Amazon has ordered 100,000 vans and the first few thousand should be delivered by the end of 2021. The press has said Rivian hopes to deliver 10,000 vans to Amazon by the end of 2022. So, if we subtract 2,000 vans from the Rivan production run in 2021, we're probably looking at 8-12K RITs and R1Ss in 2021. In 2022, we should hit at least 20,000 vehicles and maybe more.

The big question is where does the demand curve intersect with the supply curve?

If base pricing is $60K, $70K and $80K, for 105, 135 and 180kWH battery packs, it feels like there's enough demand to carry Rivian production through 2022: 20-30,000 Rivians and 10,000 Amazon vans. But if pricing is higher, especially in a post-pandemic world, demand may not be sufficient to allow Rivian to reach full production capacity, at least through 2022. In this sense, the Autoweek article may be right. Not about why Lincoln cancelled its Rivian order, but about how much demand there will be for expensive BEV SUVs in a post-pandemic world.
 
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Keithadams27

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Gang - I really don't think that this announcement means anything at all about Rivian. If anything, I believe it is net positive. I was not a fan of another SUV at the similar price point, even if outfitted differently. In my view, that project was more of a distraction than strategic for Rivian.
 

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A nice simple one paragraph comment is usually all that I can find enjoyable. Analytical comments for me should be an attachment at the most.
 

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We seem to be in agreement that Ford's cancellation of its Lincoln BEV SUV program doesn't really affect Rivian very much. Rivian gets to keep its $500 million investment from Ford. There's still some sort of relationship between Ford and Rivian, and that might be beneficial to Rivian. Rivian gets to sharpen its focus on its upcoming 3 vehicle launch.

But there are larger issues. Auto sales are down. How long will slumping sales continue, especially in a post-pandemic world? How will reduced demand affect Rivian's production plans and vehicle pricing? Those are hugely important issues, and they're raised by Ford's cancellation of its Lincoln BEV SUV program. Positioning in a changing market and pricing are critical for a startup venture, like Rivian.
 
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I don't really think the overall market trend is going to impact Rivian that much initially. Even if most of the people for which a Rivian would be stretching the budget cancel their preorder, I suspect there will still be more than enough people with deeper pockets to consume all of their initial production capacity. I think the bigger impact will be a year or two down the road and may force Rivian to alter their plans for scaling up. Fortunately the economy will have a chance to recover a bit in that period of time and there is also the Amazon van order which isn't going anywhere and will help with cash flow.
 

Coast2Coast

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I agree. In #22 above, I was trying to estimate how a general downturn in the auto industry affects Rivian. Because production capacity during the first year or two will not be large - @20,000 vehicles in the first full-year of production - Rivian is probably okay. If demand for R1Ts & R1Ss lags, Rivian can put more effort into producing Amazon vans. That's a great buffer.

Once the backlog of pre-orders is filled, what will be the sustained levels of demand for R1Ts & R1Ss? That's almost impossible to predict. How long will the post-pandemic decline continue? Will there be a shift away from ICE vehicles in spite of petroleum selling for next to nothing? How many viable competitors to Rivian will appear, how will their vehicles perform and how will they be priced? All unknowns.

An already uncertain market has just been made vastly more uncertain by the pandemic. Timing is important. Really good products need to be brought to market when conditions are right. Success occurs when products, companies and market conditions are in alignment. Rivian and its products seem right. Let's hope market conditions sustain their rightness.
 

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Yeah, I'm more bummed for Lincoln. Always wished there was more under the... tophat, attached to that aesthetic. And the only thing I never liked about Ford is their interior design. I was seriously considering an Explorer recently until I saw the inside. It's so weird to me. If you're going to build something people spend 432 freaking hours a year inside of, you have to mind the details. I'm not a car-commuter. I should be less picky, but I'm not.
 

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Here's more information on Lincoln's cancellation of its Rivian order. A top N. American Ford executive says, "the Ford-Rivian relationship is still strong". He goes on to say a Lincoln SUV with Rivian skateboard wasn't a good fit at this time. It's not clear what that means but, as earlier posts in this thread have speculated, Ford is terrifically cash strapped now. Ford likely calculated it would be too expensive to bring a Lincoln/Rivian SUV to market in 2021, and it's probably putting its money into its own internal BEV development programs, the Ford Mach e and F-150.

https://www.autonews.com/video/autonews-now-lincoln-wasnt-right-fit-ford-rivian-ev
 

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The value of Ford's production expertise certainly isn't something to dismiss but their most recent launches (thinking Explorer and Aviator) have been very troubling from a quality perspective.
True, and that's OK. If those areas of the production have been identified that contributed to the questionable quality, Rivian hopefully can benefit from that by avoiding those same questionable practices and coming up with their own process. However, if the trouble areas have not been identified, I'm sure Rivian will make whatever changes to the process that makes sense for their operation. Rivian has employed many with years of tenure in the auto manufacturing industry with impressive resumes. I can only imagine that will pay dividends as they develop their production processes.

To me this is just another case of Rivian observing / learning from current auto manufactures, on what to do and not to do just as they have been doing while observing Tesla on what has worked and not worked for them. Actually it would be better as Rivian will be working directly with Ford, possibly even collaboratively to solve these problems which could benefit both parties.
 
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