Ford Motor Co CEO Jim Farley said there are no plans to sell the company’s stake in electric truck start-up Rivian Automotive Inc, but didn’t rule out liquidating an investment that has increased sevenfold.
“We’ll look at everything,” Farley said in an interview with Emily Chang on Bloomberg TV. “Everything is on the table. Our lock-up period ends in May.”
Speculation has grown that Ford might cash out of Rivian after the 118-year-old automaker exited the start-up’s board in September and abandoned plans to jointly develop an electric vehicle.
Ford said last week it intended to record a fourth quarter gain of $8.2bn (roughly R126.4bn) on Rivian, which went public in November in the biggest IPO of the year. Ford owns about 12% of Rivian after investing $1.2bn (roughly R18.5bn) in the Irvine, California-based company founded by RJ Scaringe. Rivian also is backed by Amazon.com Inc. and other blue-chip investors.
“It’s been a great investment, we really like RJ,” Farley said. “The fact of the matter is that we’re both almost in the same segment. And so, we’ll work through that. I’ve always seen this as a strategic investment.”
Ford is in the midst of launching the electric F-150 Lightning pickup, which goes up against Rivian’s new R1T truck that debuted late last year. Ford this month doubled production of the Lightning, which doesn’t go on sale until later this spring. The move sent Ford’s stock soaring, briefly giving it a market value of more than $100bn (roughly R1.54-trillion) for the first time.
Rivian also briefly topped $100bn shortly after its IPO and was worth more than Ford and General Motors Co. Rivian shares have since plunged after its pickup launch was slower than investors expected.
Farley still sees ways Ford and Rivian could work together, but he didn’t provide details.
There “are a lot of possibilities that we could do with Rivian beyond just building a vehicle together,” Farley said. “I won’t go further with that.”
The two automakers are competitors in the truck and commercial van markets, though their product offerings differ, Farley said. Rivian has a contract to provide 100,000 battery-powered delivery vans to Amazon by the end of the decade.
Rivian’s R1T pickup “is much smaller” than the F-150 Lightning, Farley said. “Theirs is really for a lifestyle off-road; ours is really kind of a work truck, a working person’s vehicle. E-Transit is very different than their Amazon van ... but we are in the same segments.”
Farley was in California wine country Tuesday to announce a three-year collaboration with the Sonoma County Winegrowers to provide the consortium of 1,800 grape farmers with electric E-Transit vans and F-150 Lightning plug-in pickups, as well as a suite of services to help manage the fleets.
He predicted the automaker’s new Ford Pro commercial division will grow to $45bn (roughly R694.2bn) in revenue by 2025, including through providing electric charging stations, financing and logistics services to fleet operators.
“We’re in a totally unique position to dominate the commercial truck market,” Farley told reporters at the event. “We’re twice the size of our nearest competitor.”
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