Rivian CEO: We're focused on meeting demand
New York (CNN Business)Shares of upstart electric truck maker Rivian plunged as much as 17% on Monday after the company said that it is no longer working with Ford to jointly develop vehicles.
Both Ford and Rivian had already signaled they were moving away from earlier plans to work together on EVs. But the news, first reported late Friday by Automotive News, sent Rivian shares down 3% in the last hour of trading Friday, and wider reports sent shares sharply lower Monday. By midday, Rivian shares were off their lows of the day. The stock rallied slightly in the last 15 minutes of trading but still closed down 8%.
Rivian and Ford both issued statements saying that their plans and needs had changed since the original collaboration was announced, and pointed out that Ford remains a major investor in Rivian, holding roughly 12% of its shares outstanding.
Ford had announced a $500 million investment in Rivian in April 2019 that included plans for joint EV development. But a year later it dropped plans to develop a Lincoln-branded EV pickup with Rivian, and no new plans had been announced.
“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,” said a statement from Rivian. “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 shares have soared in value since its initial public offering earlier this month, despite the fact that it has yet to report any revenue from sales of its electric trucks. Even with the plunge in price Monday, the company’s market value of $96 billion is still about 20% more than the value of Ford’s (F) shares. Amazon (AMZN), which has a contract to buy electric delivery vans from Rivian, holds an 18% stake in the company.
Production of Rivian’s pickup started in September, although it is still in ramp-up mode. The company is planning to use at least some of the proceeds from its stock sales to increase its own capacity.
Meanwhile Ford recently announced a $7 billion investment — the largest single investment in its history — in a new assembly factory and three new battery plants it will jointly own with Korean supplier SK Innovations. The factory, which will build electric pickups, will be in Tennessee, and the battery plants will be in Tennessee and Kentucky. It is part of Ford’s plan to invest $30 billion in electric vehicles in the next five years, with the goal of 40% of its total sales being of electric vehicles by 2030.
Ford expects to begin deliveries of its own electric pickup, the F-150 Lightning, which is being built at a new plant in Detroit, sometime next year. Ford said that its battery electric vehicle plans are in “a much different place than we were even a year ago.”
“While Rivian is doing lots of interesting things and we’ve got great respect for R.J. [Scaringe, the Rivian CEO] and his team, we like very much where we’re at, and Ford and Rivian have both agreed we’ll not pursue any kind of joint vehicle development or platform sharing,” said Ford’s statement.
Shares of Ford (F) were up in midday trading.
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