Here's one possible five-year scenario:
The rollout of Rivian consumer vehicles (R1T & R1S) proves more challenging than expected, with only a handful delivered in 2021. Deliveries in 2022 are greater in number, but are plagued with quality control issues that prove to be a large drain on Rivian cash reserves. The late deliveries and quality issues also dampen sales, with many pre-order holders cancelling. The Amazon trucks have many of the same issues during 2022. The Rivian IPO which could have brought in $70bn, has to be postponed.
Rivian, between a rock and a hard place, decides to concentrate on its bread & butter, delivery trucks, and starts to shop its consumer vehicle unit around. GM, having already tied up with Honda on electric vehicles generally, and electric SUVs specifically, passes on a Rivian rescue. Ditto from the other major auto makers. While there is interest from smaller EV makers, none have the financial wherewithal.
One of the original Rivian investors, Ford, steps back in however and in early 2023, with Rivan deliveries still struggling, announces that they have purchased the consumer vehicles operation from Rivian. While some of the Ford electric vehicles like the F150 Lightning and eMustang are runaway best sellers by 2023, its Lincoln sister division has seen its sales plummet. In essentially buying the R1S and R1T platforms, Ford can now rebadge them as Lincolns, something it had considered doing way back in 2018 when it had a modest tie-up with Rivian.
Five years from now, I can see Rivian surviving and thriving as an EV commercial truck maker, with it's Amazon truck experience providing a springboard to other larger, heavier commercial vehicles. Having jettisoned consumer vehicles, Rivian was able to focus on trucks and produce a quality long-haul vehicle that the market preferred over its Tesla rival.
Meanwhile, Ford was able to bring its considerable auto-making acumen to bear on the new L(for Lincoln)1T and L1S models, quickly fixing the quality and production problems. While the new Lincoln models had to contend with the Hummer, the less expensive and technoligically solid L1S quickly became the EV of choice for those looking for larger SUVs in the sub $100k range. Sales of the Lincoln L1S are brisk, with the customers being those looking to replace their ICE Escalades and Suburbans and who tired of JLR quality issues on their Range Rovers. The L1T is less successful, but with Stellantis late to the party with its EV Ram, and little other serious luxury pickup competition, still does pretty well.
Finally, by 2026, charging stations outnumber gas stations which are serving fewer and fewer cars and trucks as sales of ICE vehicles decline year on year.
www.morganstanley.com
