Ford and Rivian decided that they are no longer going to co-develop an electric vehicle. Also, as Rivian’s IPO reached 10 billion last week, Ford decides to retain the 12% stake that was invested earlier. Rivian is valued to be higher than the value of Ford after its IPO.
The two companies announced their joint development of a vehicle in 2019 when Ford invested $500 million in Rivian. Later they announced that the vehicle would be for Ford’s Luxury Lincon brand, then the plans were canceled last year. While Ford still continued to seek opportunities to collaborate, the company is no longer invested in the company after Rivian’s IPO. Ford’s spokesman Ian Thibodeau says that the plans have been scrapped. Saying that the 12% stake in the start-up is also being retained.
Rivian was evaluated to be more than $10 billion since its IPO. Ford said in an emailed statement, “We respect Rivian and have had extensive exploratory discussions with them, however, both sides have agreed not to pursue any kind of joint vehicle development or platform sharing.”
Growing demand for Rivian
Rivian is now marketed as far greater value than Ford. Furthermore, Rivian stated, “As Ford has scaled its own EV strategy and demand for Rivian vehicles has grown, we’ve mutually decided to focus on our own projects and deliveries. Our relationship with Ford is an important part of our journey and Ford remains an investor and ally on our shared path to an electrified future.”
Rivian’s shares were down by 2% after the announcement on post-market trading. Meanwhile, Ford’s share remained unchanged in the marketplace. Ford CEO Jim Farley says that the increasing demand for Rivian vehicles is the main reason to end this collaboration. The growing confidence to win the electric race is increasing for Rivian. He told to Automotive News, “When you compare today with when we originally made that investment, so much has changed: about our ability, about the brand’s direction in both cases, and now it’s more certain to us what we have to do. We want to invest in Rivian — we love their future as a company — but at this point, we’re going to develop our own vehicles,”
Farley became CEO in 2020 and was not part of the initial collaboration deal. Under Farley’s leadership, the company purchased $415 million worth of convertible notes from Rivian, now known as common stock. Furthermore, it is also known that a subsidiary of Ford, Troy Design and Manufacturing also has a contract with Rivian to supply parts.