The market has lost all faith in electric vehicle maker Rivian and its chief executive, Robert Joseph Scaringe. Not only has he failed to produce the results his investors expected, but he lost the confidence that Ford had in its Rivian investment. Even if Ford eventually becomes a rival, it appears to have had no confidence in the future of its investment. Ford ran for the door when it was clear the Rivian investment had no future.
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As the lockup of Rivian shares ended, Ford sold 8 million shares. The Wall Street Journal reported that other large investors also reduced their positions. Rivian’s stock dropped 21% on the news to $22.78 a share. It is down almost 78% this year.
Before Rivian went public, it made the most important forecast a new car company can make. How many vehicles will it sell? Rivian’s initial forecast was 50,000. The company has lowered that to 25,000. It said supply chain issues were the problem. Oddly, Tesla, which sold just over 300,000 vehicles in the most recently reported quarter, expects its sales to continue to rise.
Expectations about Rivian’s future rose when Motor Trend named its Rivian R1T as truck of the year. Ironically, Motor Trend’s car of the year was the Lucid Air, which is made by a company that may go out of business.
24/7 Wall St.Rivian now must do what is close to impossible. It has to regain investor confidence after news that wrecked that confidence. The chance that Scaringe can rebuild this, after his failures, is incredibly low.
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