Two longtime rivals both wanted the same thing. Only one could win.
Rivian has been in the news a lot lately for a very good reason. It recently filed its long-awaited IPO that valued the company at over $95 billion. Its two chief financial backers, Amazon and Ford, are now enjoying the benefits. The Blue Oval's 12 percent stake is currently worth around $12 billion. Not bad at all considering it initially invested $1.2 billion. Now that some of the dust has settled, some interesting things are being revealed as to how Ford and Rivian first struck a deal.
The Wall Street Journal reports that General Motors was initially very interested in investing heavily in Rivian. Advanced negotiations took place between Rivian founder and CEO R.J. Scaringe and GM's CEO Mary Barra and President Mark Reuss.
At around the same time, Amazon was finalizing its own investment deal with the EV startup and that got Ford's attention. This was back in 2018 and Ford was under heavy pressure from Wall Street after missing earnings targets. Something had to be done. Enter Ford's now-former president of global operations, Joe Hinrichs. He met with Scaringe, listened to the latter's pitch and overall vision, and came away impressed.
Hinrichs correctly recognized that Rivian's Skateboard platform, which underpins both the R1T and R1S, could underpin a future Ford or Lincoln model. Also, a young startup like Rivian could teach a century-old corporation like Ford a thing or two about innovation.
Hinrich made clear to Scaringe that Ford was interested in making a deal. Executive Chairman Bill Ford, Jr. also met with Scaringe and he gave the green light. However, Scaringe told Hinrich that he was already in advanced negotiations with GM but the Ford exec refused to back down, reportedly saying "just because you got engaged to someone doesn't mean you need to marry them."
That made Scaringe and his team think twice about signing with GM, whose terms were not as flexible as Ford's. Rivian and Ford announced their deal in April 2019 and the rest is history. As for GM, it later invested in a certain other EV truck startup, Nikola. We all know how well that turned out.