By
Bena Ilyas
April 23rd, 2024
Ford Motor has agreed to invest $500 million in Rivian, an electric-car start-up that is widely seen as a potential rival to Tesla in order to accelerate its efforts to field a range of electric cars and trucks. TSLA stock reacts immediately.
Tesla stocks can’t seem to regain its old fame. US auto giant Ford poured $500 million into electric truck manufacturer Rivian, Tesla rival, which had already secured a major $700 million investment from Amazon.
Jeff Wilke, Amazon’s worldwide consumer CEO then said:
“We’re inspired by Rivian’s vision for the future of electric transportation. RJ has built an impressive organization, with a product portfolio and technology to match. We’re thrilled to invest in such an innovative company.”
Tesla (TSLA) shares fell 1.99 percent on the day to $258.66 after sliding below technical support at $260 and it seems that it will keep being in red for a longer time. In the meantime, Ford stock rose 0.74 to $9.57.
Tesla Pickup Truck To be Unveiled ‘Later This Year’
Tesla has been planning to release its electric pick-up truck for some while now.
Even though not much is known about the model’s design or vehicle specifications, company CEO Elon Musk had said earlier this week, that the project’s concept is much closer than we might’ve thought. He said:
“I’m very excited for the Tesla pickup truck unveil later this year. It’s gonna be great.”
He also revealed that the company would produce a pickup immediately following its long-awaited Model Y crossover. Even though high-volume production of the Model Y isn’t expected to happen until 2020, that likely doesn’t stymie the chances of a pre-production concept unveiling.
I promise that we will make a pickup truck right after Model Y. Have had the core design/engineering elements in my mind for almost 5 years. Am dying to build it.
— Elon Musk (@elonmusk) December 26, 2017
That could be the main reason why Ford’s injecting the money in Rivian has sparked the concerns of Tesla investors. Don’t forget that Musk has also predicted that 1 million of its fully self-driving robotaxis would roam the country by next year, even though it has yet to complete its autonomous technology.
Tesla Is Losing Money as Deliveries Decline
On Wednesday, Tesla said it had snapped its two-quarter streak of profits, by posting a $702 million loss for the Q1 amid delivery and logistical woes. The loss was worse than Wall Street chin-strokers expected, equivalent to $2.90 per share, compared with predictions of a 69 cent loss.
Be it as it may, no one said that this event couldn’t be predicted. In November, Rivian unveiled the first two battery-powered EVs it plans to start producing by the end of 2020: the R1T, an electric pickup truck, and the R1S, an electric SUV.
Both cars are expected to cost more than $68,000 and sell in the luxury space. The pickup is expected to directly compete with Ford’s battery-powered F-150, which is due to launch in 2021. The SUV will go head-to-head with those already offered by the likes of Tesla and Jaguar.
The CEO of Rivian, RJ Scaringe said:
“This strategic partnership marks another key milestone in our drive to accelerate the transition to sustainable mobility. Ford has a long-standing commitment to sustainability, with Bill Ford being one of the industry’s earliest advocates, and we are excited to use our technology to get more electric vehicles on the road.”
Ford’s chairman, William C. Ford Jr. added:
“We can learn a lot from Rivian, how quickly they turn around ideas. There’s a great benefit from working with a clean-sheet approach to electric vehicles.”
As for Ford, the motoring giant is counting on this partnership to enlarge its efforts in the electric cars sector. Until now, the company has not seen much success in its electrical operations, and shares have fallen approximately 9% in the last year.
As more and more consumers opt for battery-powered cars, all major brands are adapting product lines to include a range of EVs. You could say – everyone wants the piece of Tesla’s cake, but will Ford succeed where even Tesla couldn’t – is hard to predict.