By Dhirendra Tripathi
Investing.com – Rivian stock (NASDAQ:RIVN) slipped 5% in Monday’s premarket trading after the company and Ford Motor called off their plan to jointly develop an electric vehicle.
Ford (NYSE:F) traded 0.4% higher premarket.
The two companies initially announced joint development of a Rivian-powered vehicle when Ford invested $500 million in the startup in 2019. Those plans, initially intended to be pursued under Ford’s luxury Lincoln brand, were dropped last year. At that time, Ford said the partners would look at other opportunities together. Those plans too are now shelved while Rivian is still to begin large-scale deliveries.
“When you compare today with when we originally made that investment, so much has changed: about our ability, about the brand’s direction in both cases, and now it’s more certain to us what we have to do,” Ford CEO Jim Farley told The Verge. “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.”
Ford holds around 12% stake in Rivian which debuted on the exchanges on November 11 and took just four trading sessions to catapult to the position of the world’s fourth largest automaker by market cap, behind only Tesla (NASDAQ:TSLA), Toyota and Volkswagen (DE:VOWG_p). Since then, the stock has lost around 57% of its value - but is still up around 66% from its IPO price.
Seeing the global shift towards EVs, Ford has doubled down on its commitment to EVs, striking new partnerships and putting in equity in startups while committing billions in investments. This includes setting up three factories for batteries and one to make electric versions of the F-series pickup. Ford expects 40% to 50% of its global vehicle volume to be fully electric by 2030.