Ford Starts to Backtrack Support for Rivian
Supply chain squabbles have Rivian on the ropes. Will Ford stick it out with the EV startup or continue selling stocks?
Written by Andrew Koole
Reviewed by Kathleen Flear
The last half of 2021 might’ve looked spectacular for Rivian, but its performance in 2022 has been anything but. The company’s inability to secure materials for its electric vehicles is causing
nervous investors
to sell their shares. Now, one of its most notable corporate supporters,
Ford
, has joined that list. On May 13, the blue oval sold 7 million of its Rivian shares for $188.2 million. The Tuesday before, it sold 8 million shares worth $214 million. The going’s tough for EV startups, Rivian included
In September, Rivian pulled off what no other automaker could when it release the R1T, the first battery-electric pickup truck to reach buyers.
Beating Tesla and Ford to the punch, along with private investment dollars from Amazon and Ford, helped the new company achieve the highest public market debut of the year.
But the good news kind of ended there. Worries that its initial evaluation was too high sent some investors packing early. Failure to secure a supply of microchips, along with all the other supply chain squabbles of 2022, made the situation worse.
Rivian isn’t the only EV startup in this pickle. Stock values for Canoo, Fisker, and Lordstown reached all-time lows on May 11, and each of them have yet to produce their first models.
MORE: The CEO of Rivian Has a Bleak Warning Sign for the EV Industry
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Ford’s support for Rivian is still mostly there
Despite the dump of 15 million Rivian shares, Ford’s stake in Rivian remain significant. The legacy brand still owns 86.9 million shares in the startup. That amounts to 9.7% of the company.
Teaming up with Rivian
has already served Ford pretty well. The $9.1 million revenue boost it offered at the end of 2021 gave the company the extra cash needed to surpass its rival, General Motors.It’s unclear at this point whether Ford will stick it out to help Rivian weather the choppy waters of 2022’s EV race. Lucky for Rivian, its blue ovalled benefactor hasn’t pulled out in a dramatic fashion because at this point, it would probably sink the ship.
Owning a Rivian remains a challenge
As of the beginning of April, the startup had produced less than 3,500 vehicles, and output numbers for 2022 had to be dropped to 25,000 units. Starting prices and
car insurance
rates remain high for both models as well.But if you manage to get to the front of the line for a Rivian and you’re searching for affordable coverage, look no further than Jerry.
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