Ford and Rivian cancel plans to collectively develop an electrical automobile

RJ Scaringe, Rivian founder and CEO, and Ford Government Chairman Invoice Ford announce a $500 million Ford funding in Rivian.

Supply: Ford Motor Co.

DETROIT – Ford Motor and Rivian not plan to co-develop an electrical automobile, the businesses confirmed Friday.

The 2 firms initially introduced growth of a joint automobile when the automaker invested $500 million in Rivian in 2019. They later mentioned it could be for Ford’s luxurious Lincoln model, earlier than canceling these plans final 12 months. Ford, on the time, mentioned the automakers would nonetheless search different alternatives to collaborate with each other.

These plans even have now been scrapped, in response to Ford spokesman Ian Thibodeau. He mentioned the corporate retains ties with Rivian, together with a 12% stake within the start-up, which on the firm’s IPO final week reached a worth of greater than $10 billion.

“We respect Rivian and have had in depth exploratory discussions with them, nevertheless, each side have agreed to not pursue any form of joint automobile growth or platform sharing,” Ford mentioned in an emailed assertion.

Rivian, which has a far higher market worth now than Ford, on Friday confirmed termination of plans.

“As Ford has scaled its personal EV technique and demand for Rivian automobiles has grown, we have mutually determined to concentrate on our personal tasks and deliveries. Our relationship with Ford is a vital a part of our journey, and Ford stays an investor and ally on our shared path to an electrified future,” the corporate mentioned in an emailed assertion.

Shares of Rivian had been down by about 2% throughout post-market buying and selling after closing at $128.60 a share, up by 3.7%. Ford’s inventory was unchanged from its closing worth of $19.39 a share, down by lower than 1%.

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Ford CEO Jim Farley referenced the automaker’s “rising confidence” to “win within the electrical area” as reasoning to finish the collaboration.

“Whenever you examine as we speak with after we initially made that funding, a lot has modified: about our skill, in regards to the model’s path in each instances, and now it is extra sure to us what we have now to do. We need to spend money on Rivian — we love their future as an organization — however at this level we will develop our personal automobiles,” he informed Automotive Information, which first reported the collaboration was useless.

Farley, who grew to become CEO in October 2020, inherited the Rivian funding and collectively developed automobile from his predecessor, Jim Hackett. Nonetheless, Ford below Farley bought $415 million in convertible notes in July from Rivian that grow to be widespread inventory in June 2022.

A completely owned subsidiary of Ford referred to as Troy Design and Manufacturing additionally has a contract to provide components for Rivian’s R1 automobile program, in response to public paperwork.

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