Facing the big mountain ahead of Tesla, Ford, the traditional carmaker, and Rivian, the upstart carmaker, now seem confident that their own research and development can open up a "new world" in the popular electric vehicle industry.
Ford and Rivian decided on Friday to go their separate ways on future research and development of electric vehicles, rather than continuing to work together, announcing that they would abandon an earlier strategic agreement to jointly develop electric vehicles.
Executives at the two companies decided this week to abandon plans to jointly develop a new model in a partnership reached in early 2019, a Ford spokesman said on Friday. Representatives of both companies said they would focus on their electric vehicle projects in the future.
"Ford remains our investor and ally on our common path to the future of electrification," Rivian said.
A Ford spokesman said, "since the initial agreement, both Rivian and our electric vehicle research and development have made significant progress, which gives the two companies more confidence to move forward independently."
Rivian raised about $13.7 billion through its IPO listing earlier this month. Since then, investors have bought shares in Rivian, making Rivian's market capitalization surpass that of Ford and its larger rival, General Motors (General Motors Co.).
As of Friday's close, Rivian had a market capitalization of about $113 billion, while Ford had a market capitalization of about $77.5 billion.
Each according to his own ability
Since the agreement was reached between the two companies in April 2019, there have been several signs that cooperation between the two companies has gone backwards at the strategic level. The initial agreement included Ford's investment of $500m in Rivian. The two companies later said they would jointly develop the first all-electric model of Ford's luxury brand Lincoln, but also cancelled the plan last year on the grounds of concerns about cash flow at the time of the outbreak. Last spring, Ford's representative on the Rivian board announced his resignation.
Of course, Ford is still one of the major shareholders in Rivian. Ford's early investment and subsequent capital injection into Rivian gave Ford about 12% of Rivian, worth about $13.5 billion as of Friday's close.
Farley (Jim Farley), who became Ford's chief executive in October 2020, accelerated Ford's development in the field of electric vehicles. The traditional American carmaker, based in Dearborn, Michigan, plans to launch an electric pickup this spring and compete directly with the Rivian electric pickup R1T.
Farley also said in an interview with the media this week that Ford decided to abandon its joint development plan with Rivian in part because of Ford's growing confidence in its electric vehicle strategy.
It is reported that Ford plans to increase its global electric vehicle production capacity to 600000 units by 2023, twice as much as originally expected. That production is expected to be spread over Ford's first three new electric vehicles: the Mustang Mach-E, the FMMI 150 Lightning and the E-Transit. That would make Ford the second-largest maker of electric cars in the United States, after Tesla.
