Ford heads for exit from EV start-up Rivian after massive $10 billion write-down

American automotive icon Ford has sold a majority of its shares in EV company Rivian, which followed hot on the heels of news that Ford had taken a $US7.4 billion ($A10.6 billion) write-down on its Rivian investment.

Rivian was expected by some to become one of the hottest automotive companies in the world, following a November 2021 IPO which chalked up a market valuation of close to $US100 billion, making it the sixth most valuable carmaker at the time.

Since then, however, things seem to have gone downhill, and for Rivian’s investors, that has proven costly.

Ford has been there since well before the famed IPO, having invested $US500 million into the California EV maker back in early 2019.

But the relationship began to sour not long after the IPO shot Rivian to the top of everyone’s minds, and Ford began selling its Rivian shares in early 2022. This, of course, caused Rivian’s stock price to fall on the back of the news.

Rivian’s stock price has again started falling off the back of Ford’s fourth quarter and full-year 2022 financial results, when it   revealed that it had written-down $US7.4 billion on its investment in Rivian.

This news was followed by regulatory filings that show Ford has managed to offload almost all its Rivian shares, and now retains only 1.15%, or 10.5 million of the company’s shares.

It’s not the first time Ford has pulled this particular combination of financial wrangling, having reported in April 2022 a $US5.4 billion mark-to-market loss” on its Rivian investment before selling 15 million shares in two separate transactions the following month.

It’s further bad news for Rivian – which has promised the exciting looking R1T electric ute and the R1S SUV – as its shares have plummeted 84% in the space of a year.

Ford isn’t the only big Rivian investor to have suffered a hit, with global online retailer Amazon reporting last week a $US2.3 billion valuation loss on its Rivian stock.

With continued constraints being placed on the global automotive market as a whole, and the electric vehicle market in particular, combined with a persistent lack of confidence in its viability, Rivian’s future looks bleak.

If Rivian is to pull itself out of the mire, it will need to fulfil its promise of ramping up production on both its R1T electric ute and the R1S SUV. In November, the company reported that it was on track to produce 25,000 models in 2022, a possibility with production of 7,363 in the third quarter and 6,584 delivered to US customers.

Full delivery figures for 2022 are expected to be published at the end of February. It is upon these full-year delivery numbers that much of Rivian’s future hangs.