Ford Dumping Rivian

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So much for the search for the next Tesla.

This is what most are hunting. We repeatedly hear about finding the "next Tesla" or "next Amazon". For a while, many thought that Rivian would step up in the EV market to rival Tesla.

They still might.

If they do, it will be without Ford, or at least that company having a smaller holding.

It was announced that Ford would sell 8 million shares as the lock up period ends.

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The Leader In EV Pickups

One could say that Rivian is the leader in EV pickups. They expect to sell 25K this year. The stock got hammered when that number was announced, since it was half of the expected 50K the company originally forecast for 2022.

Supply chain issues were blamed for the reduction.

Rivian is one of the few companies to be producing electric pick up trucks. Ford has its electric version of the F-150 but is not making it in great quantities. Tesla, the presumed leader, has well over 1 million orders for its hotly anticipated Cybertruck.

Total production thus far: zero (outside some demo models).

Therefore, we are not looking at a heavily populated market at this point. It was the ideal opportunity for Rivian.

So why is Ford dumping the stock?

To be fair, it holds over million shares in Rivian so this is only a small percentage. The move, however, is telling. At the end of last year, Jim Farley said the two companies were not jointly working together.

Nevertheless, we have seen a big fall in the stock. The high flyer during the 4th quarter came crashing back to reality.

JPMorgan Selling Too

Ford is not the only one taking advantage of the ending of the lockup period. JPMorgan is also selling.

According to CNBC, the bank's sale is larger than Ford's.

JPMorgan Chase also plans to sell a Rivian share block of between 13 million and 15 million for an unknown seller, sources told Faber.

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The question is whether this is much of an indictment on the company. With a bank, it is not uncommon for them to sell shares, especially those received in the IPO process. Here, JPMorgan could simply be looking to add cash to their balance sheet. After all, holding such a large share of a volatile stock isn't in keeping with sound banking practices.

Turning to a cash position for the bank makes sense. Interest rates are up and they could turn that money into a higher return than a couple months ago.

The question centers on Ford. Here is a company that is not killing it in the automotive industry. Their sales are in declines, a trend that started half a decade ago. In the EV market, Tesla is the undisputed leader in the West, rivaled only by the Chinese companies. Legacy auto is getting crushed by the EV maker.

Jim Farley seems intent on turning the company around while embracing the switch to electric. With such a stake in Rivian who, from all reports, have a strong product, one would think the alliance would grow.

Yet it seems that Ford is stepping away, looking to go it alone.

Does it know something? Maybe Farley is aware of some issues that most do not see.

Whatever the motivation, we should not be surprised if Ford ends up selling more shares as time passes. The interest does not appear to be there.

Ford invested over $1.2 billion in the start up company. The sale of 8 million shares will net more than $200 million. With the remaining holdings, Ford still stands to come out ahead.

Perhaps it is nothing more than a cashflow issue. Ford has not been killing it so the extra liquidity won't hurts its balance sheet.

Always fun times in a new market like electric vehicles.


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I think that is the mistake that companies fall into when they want to resemble or equal the sales of another, since Tesla has a won market and any other that tries to compete with it will have to propose something innovative to qualify for first place in sales of electric cars in this case the Trucks.

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They are definitely in a tough spot. I thought they would invest more in the F-150 but apparently not

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It seems they are not sold on the EV move forward. Perhaps the legacy companies are right. We will see how it all unfolds.

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I am not surprised they are dumping it because I don't think Rivian is really doing that great. It makes me wonder if GM would be doing the same to Nikola if Nikola didn't self-implode.

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It is good to see Ford wants to go ahead alone further…
Their EV production is not large but they could be focussing on something.
I thought their truck would do great. Still it is there.
I’m watching Ford…

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The F150 is a strong seller. We need to see them commit to this being converted to electric. Their production schedule is not very impressive.

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We will have to see what happens and what are their next steps.

I do have some Ford stocks from a while ago…

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Ford is probably going to end up like that guy selling 10,000 bitcoin for two pizzas. Rivian looks to be a true player in the EVs industry. As far as I can remember their pick up has quite a range compared with most of the EVs of today. Looking at diesel prices EVs might boom in the years to come.

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Rivian might end up being a major player, or they might fail. This is a tough industry. That is why, other than Tesla, no new companies sold over 500K in over a century. It is not an easy business.

Rivian will lose money for years and someone has to be willing to fund that.

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I find the strategic decision making by Ford has been on a steady decline since Mullaly left the company. Hackett and Farley have been abysmal, all but completely undoing the progress made during the turnaround. The worst of these decisions IMO was to stop making cars altogether. They had some very popular models and just completely obliterated their market share in the midsize and compact car segment by cancelling those models in their biggest market. They also had an opportunity in the full size car market that they never took advantage of when the Panther platform was retired. I think Mullaly said he wanted people to think of Ford as BMW performance with Toyota quality. They sort of half assed both and got neither save for a couple exceptional models. Maybe the electric truck and SUV craze will change things for them, but I'm skeptical. Like Tesla, they'll have to bring down the profitable transaction price on electric vehicles somehow if they want to reach the average consumer with those products.

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Still early days and plenty of money to be made depending on where one invests. I am no Ford fan but one has to remove personal feelings when it comes to financial decisions. Ford are not dummies so I suspect they sold shares for some other reason. The EV market is going to be huge so whoever is involved surely will do well but think it is just way too early.

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