Ford Motor Company sold 7 million shares in electric car maker Rivian Automotive for $188.2 million, or $26.88 per share, and Ford currently owns 86.9 million shares in California-based Rivian.
Rivian is grappling with the markets with its rivals, including fierce competition from Ford’s electric pickup truck, as well as weak production at its factories due to a supply chain crisis, prompting the electric car maker to halve its planned production for 2022 to about 25,000 vehicles. Read More [Rivian Shares Jump Despite First-Quarter Loss].
Ford previously relinquished about 8 million shares of its stake in Rivian for $214 million, pushing Rivian’s shares to close at $26.70 per share. Read more [Giant Ford Sells 8 Million Shares of Rivian].
It was Ford’s first investment in Rivian since the beginning of 2019, as part of a strategic partnership that included plans to co-develop an electric vehicle, but that project was eventually scrapped, and the two companies competed against each other in the emerging market for electric pickup trucks.
Changes in Rivian’s share price between the rise and fall had a severe impact on Ford’s net profit, as Ford made a fictitious gain of 8.3 million last year, after Rivian shares rallied following the initial public offering in November, while the sale of shares in recent months has been a burden on Ford. As for the first-quarter results, it lost $5.4 billion in net profit, which pushed it to record quarterly losses.