Ford Just Lost Over $3 Billion Because of Another Car Company
Ford records quarterly losses totaling $3 billion, resulting from investment and chip shortage, which weighs down its consumer confidence.
Despite the increasing demand for sports vehicles and pickup trucks, Ford Motor has lost a generous sum of money due to the global chip shortage, limiting its car production.
The automaker is also suffering a loss in the prices of stock of Rivian, an
electric vehicle
project they have a share in. In April 2019, Ford invested $500 million with Rivian with plans to develop electric trucks together. However, the project did not succeed, and
Ford
did not withdraw, but the high prices for their new vehicles have helped them overcome the impacts of lower sales and the slides in Rivian stock. Although the company's performance is in question, Ford is working towards increasing its supply of semiconductors to improve its production. Learn about the automaker's plans to make rapid growth in sales.
Jerry
provides you with all the details. Ford's loss due to chip shortage and Rivian
The ongoing chip shortage has made Ford and General Motors close their production plants, which manufacture pickups.
The scarcity has depleted the vehicle inventories, and also, pressure from suppliers has caused inflation, which Ford will work to recover by setting additional vehicle prices.
As the automaker continues to battle with semiconductor shortage, its sales of new vehicles slid down by 17% in its first quarter of production.
However, the company received positive sales during spring. Generally, SUVs' overall retail sales record increased to 41%, which led to an increment of 74% in total sales.
With the demand for Ford's newest products, Bronco, Bronco sports SUV, and Maverick pickup truck, the sales have increased, and the vehicles are selling off from the yard within four days after production. Also, Ford has recorded a profit of 271 million dollars despite their poor results in the auto market.
Rivian's road to becoming successful
Although the electric vehicle business is incredibly expensive, Rivian enthusiasts hope that their trucks and SUVs will have an outstanding market share and exponential growth like
Tesla
, the most valuable automaker globally. Initially, Rivian seemed the best producer of EVs as it achieved the highest public market sales, recording a sum of $12 billion.
As
Rivian
aspires to keep the world adventurous forever, it has reported a loss of $2 billion, like other electric vehicle companies, which makes it risky for them to develop electric vehicles. Despite this, Rivian engineers are working towards bridging their production and sales to manufacturing vehicles that will offer a market challenge.
Rivian aims to capture over 10% of the EV market share, and if the growth becomes successful, it could be a significant and profitable automaker in the future.
What is the future of Ford and Rivian?
Automotive News
records that the collaboration between Ford and Rivian has declined. Ford plans to produce their vehicles, and regarding the growing confidence to win the electric space, the automakers have agreed not to develop any vehicles together. According to
Detroit News
, Ford expects its supply chain constraints to improve in the second quarter. Its primary focus is on the raw materials needed to produce its electric vehicle batteries, and the company is working to break its production shortcomings to meet customers' demands. Additionally, gradual economic recovery will increase consumers' confidence, resulting in faster sales.
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