Ford Upset General Motors By Investing in Rivian
Ford made a massive statement by investing in Rivian, which made General Motors a little upset. Rivian only just became a publicly-traded company, and as of November 16, 2021, its market valuation is over $130 billion. That puts it behind only four other automakers in the world, which is pretty remarkable. That’s why GM is sad about Ford beating it to the punch.
What percent of Rivian does Ford own?
Before going public, Rivian received billions of dollars in funding from private investors. One of those investors is Ford, which owns 12 percent of Rivian, valued at over $15,600,000,000 in the current market. Consequently, that’s more than enough to upset General Motors, who wanted to invest as well. CarScoops reported that both automakers’ representatives met with Rivian, but only one was successful in becoming a private investor.
The investment has already proven itself to be a smart one for Ford. A current valuation of around $16 billion makes it quite the jump up from its initial investment of $500 million. Making that amount of money from investing in a new company will upset competitors like General Motors.
Ford and General Motors both wanted to invest in Rivian
Ford’s former president of global operations met with RJ Scaringe, founder and chief executive of Rivian, in 2018. General Motors chief executive and president Mary Barra and Mark Reuss also met with Scaringe. Both intended to invest in the startup, and Ford was eager to use a Rivian platform for its own EVs. The blue oval’s executive chairman Bill Ford met with Scaringe after meeting with GM representatives to ensure the opposition didn’t win.
Eventually, Rivian executives decided to go with Ford and its proposal because of more flexible terms. Then in April 2019, Ford announced it was investing $500 million in the automaker startup. Over the last few years, the investments have grown as needed and reached the 12% mark where it currently sits. Ford’s earnings were not as strong as usual during this time, so this type of investment was hazardous.
Ford made the right choice, General Motors is sad
It turns out investing in Rivian was a fantastic choice for Ford, in hindsight. That’s what makes General Motors so sad about it. We’re sure whatever the reason for the new automaker going with Ford over GM could’ve gone back and forth through persuasion forever. Looking back on it now, GM probably wishes it took at least one more swing at winning over the makers of the R1T and R1S.
Rivian’s massive evaluation comes from preorders and investments. The R1T looks like one of the most unique and exciting pickup trucks ever made. It’s entirely off-road capable, built to be a mobile camper, and looks unlike anything you’ve ever seen. Its R1S SUV offering is just the same and garners interest for similar reasons.
Rivian is proving itself to be the next big name in the automotive industry. Ford took a leap of faith in putting its money forward to help propel Rivian to success. Looking back, General Motors wishes it would’ve done the same. We could even potentially have been living in some alternate reality where Ford and GM invest and part-own Rivian together.