Rivian $RIVN and Ford $f cancels deal to develop electric vehicles
Summary
- The decision to cancel the EV was mutual, according to Rivian. “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,”
- Ford’s spokesman Ian Thibodeau said that the company retains ties with Rivian, including a 12% stake in the start-up, which at the company’s IPO last week reached a value of more than $10 billion.
- Rivian went public on the NASDAQ on the 10th of November at an IPO price of $78.00, raising nearly $12 billion. The company’s shares, which trade under the ticker symbol “RIVN”, closed trading on Nov. 12, 2021, at a price of $129.95, giving the company a market valuation of $127.3 billion.
On Friday Ford Motor and Rivian confirmed that they no longer plan to jointly develop an electric vehicle.
In 2019, Ford Motors invested in Rivian about $500 million. They later said it would be for Ford’s luxury Lincoln brand, before canceling those plans last year. Ford, at the time, said the automakers would still seek other opportunities to collaborate with one another.
The decision to cancel the EV was mutual, according to Rivian. “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,” Miranda Jimenez, a spokesperson for Rivian, said in a statement provided to The Verge. “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.”
However, Ford’s spokesman Ian Thibodeau said that the company retains ties with Rivian, including a 12% stake in the start-up, which at the company’s IPO last week reached a value of more than $10 billion.
“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,” Ford said in an emailed statement.
“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,” the company said in an emailed statement.
About Rivian
Rivian is an automaker company and automotive technology company founded in 2009. Rivian is building an electric sport utility vehicle and pickup truck on a “skateboard” platform that can support future vehicles or be adopted by other companies.
Rivian went public on the NASDAQ on the 10th of November at an IPO price of $78.00, raising nearly $12 billion. The company’s shares, which trade under the ticker symbol “RIVN”, closed trading on Nov. 12, 2021, at a price of $129.95, giving the company a market valuation of $127.3 billion.
The shares are today Monday trading lower in the pre-market hours. At the time of writing, it is down 5% trading at $122 per share.
About Ford Motors
Ford Motor Company is an American multinational automobile manufacturer headquartered in Dearborn, Michigan, United States. It was founded by Henry Ford and incorporated on June 16, 1903. The company sells automobiles and commercial vehicles under the Ford brand, and luxury cars under its Lincoln luxury brand.
Unlike Rivian stock, Ford ($F) is trading on the New York Stock Exchange at the current price of $19.39 per share. In the past year, the stock price has increased 118%.
Bottom Line
Ford helped Rivian to get to this point as was recently revealed in its IPO. Ford built the body-in-whites for Rivian’s prototypes — the skeletal frame that rides on the chassis — and agreed to supply “certain vehicle components… including related engineering work and tooling” for the entire lineup of R1 vehicles.
What remains to be seen is if the Rivian stock price will trade lower due to the cancellation of plans. If this happens it means that Ford’s deal played an important role in Rivian’s IPO.
Disclaimer – I/we have no position in any stock mentioned. I wrote this article myself, and it expresses my personal opinions. I am not receiving any compensation for it, other than FDGT Academy. I do not have or had in the past any business relationship with any company that is mentioned in the above article.
Natalia C. - Junior Analyst at FDGT Academy
I am a stock analyst/investor with prior experience and knowledge to BSc Accounting and Finance. After completing my degree and exposure to the accounting firms I decided that the direction I should choose is towards the Investment world. I completed my masters in Investment Management where it gave me solid fundamentals to build my career on. I have examined a lot of different aspects of investment, from REITS, derivatives, currencies, bonds, equity and hedge funds. I never stopped learning about the market which is why I can analyze and write articles for FDGT community always personally opinionated. My passion are green energy and electric vehicles stocks as a whole. I also had my share of analyzing the work form home stocks that are coming to take over in the upcoming years.
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