The Blue Oval has decided to write down the value of its investment in the EV maker by $7.4 billion in 2022.
Ford has recently scaled down its stake in Rivian to just 1.15 percent. This move follows Blue Oval’s decision to write down the value of its investment in the EV maker by $7.4 billion in 2022. Of note, Ford previously held an 11.4 percent stake in Rivian at the end of 2021. The monetization of Ford’s stake in Rivian is also said to be “nearly complete.”
According to Reuters, shares of Rivian fell 3.4 percent in the afternoon following the announcement of Ford’s reduced stake. This isn’t the first time the company faced a corporate and financial challenge, noteworthy of which was last year when news of Ford selling its stake in the company first broke out.
Rivian has had a rough run in 2022, losing around 82 percent of its value due to supply chain disruptions and missed production targets. The company had aimed to produce 25,000 units in 2022 but reports noted that it failed to hit the goal.
Reuters recently reported that Rivian is planning to lay off 6 percent of its staff due to declining cash reserves. This announcement has caused further concerns for the company’s future.
Ford’s updated stake in Rivian was disclosed in a recent filing and the company declined to comment to Reuters on the sale. It is unclear what impact this reduced stake will have on the future of both companies. However, the recent developments highlight the challenges facing the electric-vehicle industry and the difficulties in achieving sustainable growth in the market.
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Meanwhile, Rivian’s Vice President of Manufacturing, Tim Fallon, provided an update on the company’s progress in 2022, which was its first full year of production. He also shared a glimpse into what 2023 holds in store.
In 2022, Rivian said it successfully produced 25,051 electric vehicles, out of which 24,337 were “factory-gated” and 20,332 were delivered to customers. The company announced earlier this month that it is increasing its production volume to help reduce the order backlog, which for the R1T and R1S pre-orders currently exceeds 100,000.