Ford has invested in upstart EV automaker Rivian multiple times over the last couple of years, including an initial investment of $500 million back in 2019 and an additional $902 million in Q1 of 2021. Those investments have paid off big time for the automaker thus far, as it owns a sizeable stake in Rivian after luring the upstart company away from General Motors at the last minute. Ford’s foresight in that regard continues to pay off, as it earned $8.2 billion from its Rivian investments in Q4 of 2021 alone, the automaker has announced.
Rivian officially went public in early November of last year, and its stock price quickly rose as investors showed tremendous interest in the company and its potential. The automaker sold a total of 153 million shares at $78 each, but its stock price jumped as high as $172 in just a couple of days before falling down around the $100 range as many investors cashed out and took the easy profit. Yesterday, however, the stock closed at just $73.16.
Regardless, it’s clear that Ford’s investment in Rivian has paid off big time already, even though the two companies ultimately decided to nix plans to build a FoMoCo product on the latter’s Skateboard platform. In its early days of trading, Rivian even became the largest company in the U.S. with zero revenue, following what was the sixth-largest IPO in American history.
Rivian recently began production of its R1T pickup and R1S SUV and has been investing heavily in ramping up production after receiving 55,400 pre-orders for both models, as well as an order for 100,000 delivery vans from Amazon. It ultimately would up building around 1,000 vehicles in 2021 in total, in spite of several delays and supply chain issues. Now, Rivian is looking to greatly expand its production capabilities after announcing plans to build its second plant – a $5 billion dollar facility – in Georgia late last year.
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Wow, what a massive ROI this is. And more yet to come! What an incredibly smart decision by management at the time. This should provide a nice boost to Ford’s reserve cash.