Rivian Stock Takes a Nosedive

Ford is selling 8 million shares of American electric vehicle startup Rivian. Ford owns 11.4 percent of Rivian, with 102 million shares, but lost US$3.1 billion during 1Q22. The announcement caused Rivian’s stock to drop 17 percent in US premarket trading and more investors are hurrying to sell Rivian’s shares. JPMorgan Chase, for example, is planning to sell between 13-15 million shares. 

Rivian’s shares can be bought and sold in Mexico through the Institutional Stock Exchange (SIC) from April 2022. At the time, Rivian was perceived as an attractive investing option: “In BIVA we continue to sum up efforts to strengthen the Mexican stock market and bring the country attractive investment offers, such as Rivian,” said María Aria, Director, BIVA.

However, Rivian’s stock fell by 72 percent throughout 2022. Ford initially invested in Rivian because of its interest in battery development and once planned to develop a pickup alongside the startup. Rivian’s stock started falling after the March 2022 announcement that supply chain disruptions had forced it to cut its production, so it would not be able to fulfill all its orders. Moreover, competitors are starting to take over its major clients such as Amazon, one of Rivian’s largest investors and customers. Multinational automaker Stellantis, for example, announced that Amazon will be its first commercial customer for the Ram Promaster electric van. 

When Rivian was listed on Nasdaq in 2021, its shares surged as much as 57.68 percent, reflecting investors’ interest in the emerging EV market. Others, such as Tesla’s Elon Musk, remained skeptical. "There have been hundreds of automotive startups, both electric and combustion, but Tesla is (the) only American carmaker to reach high volume production and positive cash flow in the past 100 years. I hope they (Rivian) are able to achieve high production and breakeven cash flow. That is the true test," aid Musk in a tweet as reported by MBN.

Jim Farley, CEO, Ford, recently announced the automaker’s goal to sell more EVs than Tesla and is working to increase its EV offering. Its most recent EV is the F-150 Lightning truck, an all-electric version of the F-Series pickup and a top seller for 45 years in a row. “America’s real transition to electric vehicles starts now. The F-150 Lightning is just the beginning of our ambitions for growth and leadership in digital, electric vehicles,” said Farley.

Although Tesla is leading the EV market, Toyota is the brand that sells most of EVs commercialized in Mexico followed by Ford, KIA, Nissan and Honda.