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Ford Says It Lost $5.4 Billion On Its Rivian Investment (Updated)

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In November 2021, Rivian – the EV startup that Ford partially hitched its wagon to several years ago – had an immensely successful IPO. As Ford Authority reported at the time, its market cap quickly blew past both Ford and GM, and for a period of time existed as the most valuable company with zero revenue. However, the fledging EV automaker has experienced a number of significant setbacks since then, and combined with the uneasiness exacerbated by the ongoing chip shortage and the situation in Ukraine, has resulted in a significant contraction of its stock price. Now, Ford has officially disclosed how much it’s lost by holding on to its Rivian shares, and it’s a staggering $5.4 billion.

Technically speaking, The Blue Oval hasn’t lost any money on its investment in Rivian, as it hasn’t sold its shares. As Ford Authority outlined back in 2019, the automaker initially poured $500 million into the company, a figure that roughly doubled in a subsequent round of fundraising. If The Blue Oval backed out of its investment now, it would still profit from its investment, as the company currently owns a 12 percent stake in the company that’s now worth about $6.5 billion. That said, it’s a sharply reduced number from the $12 billion it could have received had it dumped its shares in November 2021. Ford CEO Jim Farley stated in January 2021 that the company is holding on to its shares, but there is always a chance that a further valuation change could change that outlook.

Aside from the roughly $5 billion it could gain from selling its stake from Rivian, it remains unclear if Ford is getting anything substantial out of its murky relationship with the company. Both companies nixed plans to jointly develop a Ford-branded vehicle in late 2021, roughly one year after they decided against using Rivian architecture for a fully electric Lincoln. The Blue Oval is currently embarking on its $50 billion plan to produce 2 million EVs annually by 2026, a potential indicator that it does not need any of the startup’s expertise. Rivian’s stock is currently pegged at $31.22 per share, or just 18 percent of its $172.01 highest share price thus far, which was cemented when the markets close on November 16th, 2021.

We’ll have more on Rivian and The Blue Oval’s EV plans soon, so subscribe to Ford Authority for continuous Ford news coverage.

The title of this article has been changed to more accurately reflect the current situation regarding Ford’s Rivian investment.

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Ed owns a 1986 Ford Taurus LX, and he routinely daydreams about buying another one, a fantasy that may someday become a reality.

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Comments

  1. COBRA THERAPY!!!

    That 5.4 billion could have been spent on new powerful V8s for the Mustang and a four door 850hp car!!

    Reply
  2. Thurston Munn

    They deserve it. Going all in on Evs and getting all woke. Exactly why I sold all my Ford stock, never made any money on it anyway. Been making a lot more putting it into natural gas. All this BS may eventually bankrupt these car companies. Once all the EV subsidies go away, no one will be able to afford a vehicle.

    Reply
    1. Eric

      Yet here you are on ford authority complaining about a “woke” company (as if that had any meaning and isn’t hilariously contradictory). Funny how every company that is investing in evs is profiting from it.

      Reply
      1. NCEcoBoost

        EVERY car company is profiting right now thanks to the “chip shortage” and ridiculously overpriced vehicles (and the tons of brain-dead buying them). Just wait until the next recession arrives – probably not too far off – and then you’ll see the carnage, especially among those heavily into EVs. I agree 100% with Munn, even though he could have said it better.

        Reply
      2. Stephen Ketterer

        Eric: Temporarily profitting.

        Reply
    2. Tigger

      I think Rivian will go the way of Lordstown Motors.

      Reply
      1. NCEcoBoost

        For sure, if Amazon backs out of its deal with them. Or maybe Amazon will just buy them and limit its products to Amazon-use only, as many think.

        Reply
    3. Explorer ST

      All I read is that you’re not a very good stock trader.

      Reply
      1. Tigger

        Who says I was trading stock in either company? If I did I would bet one loosing money

        Reply
        1. Explorer ST

          Was in response to Munn’s original post. Not yours.

          Reply
  3. Mike

    Just goes to show you how high the EV expectations were, and where they are probably headed in the future. A loosing proposition for everyone.

    Reply
    1. D Webster

      “loosing”

      Reply
  4. Greggt

    Actually they should have spent that money improving quality, supply chain, and their non-existent customer service which rivals ATT. Ford has taken their eye off the ball and the results show it!

    Reply
    1. Bob

      AGREED!!

      Reply
  5. Joe B.

    On Jan. 19 Ford Authority reported Ford earned 8.4 billion on Rivian investment. Easy come easy go, I guess.

    Reply
  6. Al B

    The headline suggesting this is a loss for Ford is a bit absurd. Ford is still way ahead on its Rivian investment, as you later explain. Personally, I think Rivian is a great company and the products are very well designed. Compared to Tesla’s market cap the stock is quite cheap, so I think Ford is correct to hang in there, though selling at the top and investing in quality upgrades also would have been a good idea. As for the EV nay-sayers, I suspect most are guys who want to drive something with a V8 until the day they die. Which is fine, but not necessarily the most forward-looking orientation!

    Reply
    1. David Dickinson

      Tesla has hundreds of thousands of vehicles on the road. Rivian has 1,000. Tesla seized first-mover advantage and will never give it up. Rivian and all these pop-up EV companies are doomed to fail. They are too late to the game and inflation, supply chains, and a forthcoming recession are going to put them in the history books.

      Reply
      1. Rocket Surgeon

        Like IBMs first mover “advantage”

        Reply
        1. David Dickinson

          I say Tesla and the traditional automotive manufacturers will succeed in the EV market and the rest will fail. Time will tell, and I bet it will only take a couple or years for that to play out.

          Reply
  7. Explorer ST

    Also the title of this article could be worded better. To something that accurately reflects what really happened. They lost 5.4 billion from peak value. Their ROI is still very much in the billions! Like any other EV startup that IPO’d during the pandemic there is always a “buy the hype, sell the news” situation, leading to crazy valuations and traders taking their profits.

    Reply
  8. David Dickinson

    2022 is the year that the EV bubble bursts. Sell your stock now before it’s too late.

    Reply
  9. Shawn Hill

    Relax people … this is just a clickbait headline. How could Ford “lose” $3.1 billion on their investment in Rivian, when there initial investment was only $500 million? This “loss” is just a paper loss after Rivian’s stock price shot up after their IPO. This loss just takes into account the Rivian stock price dropping dramatically back down to a more realistic level (Ford had previously taken a paper gain/profit of $9.1 billion from the Rivian stock dramatically spiking in value). Without this special pre-tax write-down, Ford had a profit of $1.6 billion. Until Ford actually divests itself of Rivian stock there is no real loss or profit from it’s Rivian investment.

    Reply
  10. David Dickinson

    I’m waiting for the not click-bait headline that Ford just posted a $3.1B quarterly loss…but didn’t change its outlook.

    That said, Ford is going to lose $500M if it holds Rivian stock.

    Reply
  11. Steve

    Failure number 1. These vehicles are as ugly as can be. I couldn’t imagine having to walk out of the house and see this thing in my driveway everyday. If they want to survive they should fire their head designer. Head hunt someone from Tesla. That doesn’t mean they will survive but would be their best shot. I saw one of these trucks a couple of weeks ago. I mean this truck was the ugliest thing I have ever seen. Hey Ford, why not concentrate your resources on success, like getting the Broncos out on the road. Just a thought.

    Reply
  12. BADIH JOHN MAJDALANI

    Another Lincoln Blackwood.

    Reply
    1. David Dickinson

      You hit that nail right on the head.

      Reply

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