Ford and Rivian Won't Be Doing the EV Race Together

On Friday, Ford Motor F and Rivian Automotive Inc RIVN confirmed they no longer plan to co-develop an EV that was announced back in 2019 when the Blue Oval invested $500 million in the startup. However, Ford will retain its stake in Rivian which last week exceeded $10 billion in value.

Rivian's IPO

Since going public on November 10th in one of the biggest IPOs of the year, Rivian quickly surpassed the market cap of both Ford and General Motors GM. In its public debut, Rivian raised about $13.5 billion by selling 175.95 million shares at $78 each. What is amazing is that a company that has generated almost no revenue has sold 176 million shares with now having over 891 million shares outstanding. That is just how big the EV excitement is as, at $128.60, the company has a market cap of almost $115 billion.

Ties Eemain

As Ford tweaked its EV strategy, and demand for Rivian vehicles has grown, they both became more confident they can win the EV race on their own and therefore mutually decided to abandon plans of a joint vehicle. Ford's CEO Jim Farley became CEO in October last year and inherited the Rivian investment from his predecessor. But in July, he added another purchase to the total of $820 million for shares Ford paid in Series B and D offerings as the Blue Oval purchased $415 million in convertible notes that will become the common stock in June 2022. Ford owns 11.4% of the shares that are now worth approximately $13 billion along with about 10.5% of the voting power.

The EV Space is Getting Packed

According to public documents, a wholly-owned subsidiary of Ford called Troy Design and Manufacturing also has a contract to supply parts for Rivian's R1 vehicle program. Also on Friday, a report from Bloomberg revealed that Apple Inc's AAPL is intensifying its EV efforts to launch a self-driving vehicle within four years.

Upon the report, shares of the tech titan reached new heights following disappointing quarterly results. Apple's EV entry means Rivian's, as well as Tesla Inc's TSLA job of leading the show will become much harder. Moreover, newcomers keep on coming with Atlis Motor Vehicles and Hercules Electric Vehicles launching their electric pickups that will be powered by Worksport Ltd's WKSP revolutionary TerraVis solar technology that has the power to rewrite the rules of the EV game.

Support is Key

Besides Ford, Amazon.com, Inc AMZN participated in Rivian's Series A, D, E, and F financing rounds. It paid $1.35 billion and bought $490 million in convertible debt. At the IPO, it additionally purchased 2.56 million shares for $200 million. It now owns about 18.5% of the shares that come with approximately 16.9% of the voting power. Last but certainly not least, it has preordered 100,000 of Rivian's electric delivery vehicles (EDVs). Besides this order, Rivian has disclosed that it has received 55,400 preorders for its R1T all-electric pickup and R1S SUV which, if not canceled, should bring in revenue of approximately $4 billion.

But a company with almost non-existent revenue and a $115 billion market cap will have to execute flawlessly to keep up the hype.

This article is not a press release and is contributed by a verified independent journalist for IAMNewswire. It should not be construed as investment advice at any time please read the full disclosure. IAM Newswire does not hold any position in the mentioned companies. Press Releases – If you are looking for full Press release distribution contact: press@iamnewswire.com Contributors – IAM Newswire accepts pitches. If you're interested in becoming an IAM journalist contact: contributors@iamnewswire.com

The post Ford and Rivian Won't Be Doing the EV Race Together appeared first on IAM Newswire.

Image Sourced from Pixabay

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