Ford’s investments in electric vehicle company Rivian have led to its reporting dramatic revenue losses in the first quarter of this year, even though the company is selling its own vehicles successfully.
Last week, Ford reported $34.6 billion in total revenue for the first quarter of 2022. That was 5 percent less than the first quarter of last year and came with a reported net loss for the quarter of $3.1 billion. The company said that if it were not for the $5.4 billion in losses sustained as a result of an early investment in Rivian, it would have had a net gain for the quarter of $2.3 billion.
Rivian was founded in 2009 and went public in 2021. Both Ford and retail/tech giant Amazon were early investors in the electric vehicle start-up.
Ford had even announced that it would develop an electric pick-up truck with Rivian, although those plans were later scrapped.
Ford started its investment in Rivian in April 2019 at $1.2 billion, and now holds 12 percent of the company’s shares. Ford initially saw some unrealized gains on its investment of up to $8.2 billion, but Rivian’s fate has turned gloomy of late. Amazon reported last week that it lost $7.6 billion in the first quarter on its Rivian investment.
During Ford’s earnings conference call law Wednesday, CEO Jim Farley said the company remains committed to going all in on electric vehicles. He did say the company would take a different approach than its industry competitors going forward.
Farley said that moving forward, Ford’s electric vehicle designs are going to be “progressive” and will be aimed at bringing new customers to the Ford and Lincoln brands. He said the new designs will not simply be electric versions of the existing vehicle lineup.
The CEO said Ford is expecting to sell 2 million electric vehicles every year by 2026 and wants to have 50 percent of all sales in electric vehicles by 2030. Those targets are also mandated by a Joe Biden executive order issued last August.
For its part, Rivian blamed supply chain issues for its troubles in the first quarter. The company appeared to suffer huge production problems because of a microchip shortage. Meanwhile, consumers remain wary of electric vehicles not produced by Elon Musk’s Tesla.