Lincoln, Rivian Scrub Lincoln EV Project Due to Coronavirus

Ford Motor Co. is cancelling plans to develop an all-electric SUV for its Lincoln brand as part of a joint venture with EV start-up Rivian due to the coronavirus pandemic.

The Lincoln EV is one of at least two product programs that Ford confirmed it has had to rethink due to its a financial crunch severely worsened by the global health crisis. The automaker also said it is delaying development of the Bronco Sport crossover.

Ford reported a $2 billion loss for the first quarter, much of that due to the coronavirus outbreak that has slashed global sales and forced the automaker to shutter its entire North American production network. The losses are expected to extend into, and likely deepen during, the second quarter, according to industry analysts.

Ford invested $500 million in Rivian last year, and the SUV was to mark its first joint vehicle program with the suburban Detroit start-up. Rivian was expected to take the skateboard-like platform it developed for two of its own vehicles and use it to underpin a large SUV for the Lincoln brand.

Including its Rivian investment, Ford was expecting to spend almost $12 billion on its electrification program through 2023. The decision to scrap the Lincoln SUV now raises questions about whether the effort might face further cuts. But Ford downplayed the impact of the move.

(Lincoln and Rivian announced their SUV program in January. Here’s the original story.)

“Our strategic commitment to Lincoln, Rivian and electrification remains unchanged and Lincoln’s future plans will include an all-electric vehicle consistent with its Quiet Flight DNA,” the luxury brand said in a statement. Going forward, the automaker said, it still plans for “an alternative vehicle based on Rivian’s skateboard platform.”

Lincoln officials also noted that the brand is working on a new battery-car using its own technology.

Ford’s electrification program is actually a complex mix. It is working on hybrids, plug-in hybrids and pure battery-electric vehicles based on technology developed in-house. This includes the Mustang Mach-E, the automaker’s first long-range BEV, which it has said it still plans to put into production during the second half of this year despite the impact of the pandemic on its R&D and manufacturing operations.

(Lincoln Corsair Grand Touring set to become luxury brand’s second plug-in hybrid.)

The tie-up with Rivian provides Ford a second path using both the skateboard platform and other technologies developed by the EV start-up.

Ford also announced a series of tie-ups with Volkswagen last year that will, among other things, allow it to use VW’s modular battery-car platform for one or more BEVs to be sold in Europe. VW itself has launched one of the world’s most aggressive EV programs, with as many as 50 different all-electric vehicles expected to roll out from its various brands by mid-decade.

As for Rivian, it’s unclear how significant an impact the Lincoln SUV decision will have. A spokesperson for the company, based in Plymouth, Michigan, said the two automakers “continue to be great partners.”

But Rivian is facing other challenges due to the pandemic. It recently announced that it will push back the launch of its first two products, the R1S sport-utility vehicle and R1T pickup truck, until 2021.

It is unclear if the pandemic will impact another major alliance Rivian has formed with Amazon. The online retail giant last year led a $700 million investment in the EV company and subsequently announced a deal for Rivian to supply it with all-electric delivery vans. The first of those are set to be delivered in 2021, with the full order of 100,000 vans due by 2024.

(Amazon and Rivian offer a first look at their new all-electric delivery truck.)

Ford’s decision to scrap the Lincoln SUV project came as only a mild surprise to industry watchers. It has been widely predicted that cash-tight automakers would have to delay or cancel some programs in the coming months and electrified vehicles were considered the most vulnerable, noted J.D. Power analyst Tyson Jominy, because they still tend to be money-losing efforts. Manufacturers, Jominy forecast, will shift resources to their most profitable products, especially pickups and SUVs.