Why Ford's Rivian Breakup Makes It a Better EV Stock
After working together for a time to produce an electric vehicle (EV) in alliance, Ford Motor Company (NYSE: F) and Rivian Automotive (NASDAQ: RIVN) canceled their plans publicly on Friday, Nov. 19. Ford's CEO Jim Farley said Ford is now confident it can design and manufacture EVs on its own. The market reacted by bidding Ford's stock down slightly, while Rivian's shares jumped more than 4% before the close of Friday trading. However, this response may be overlooking a potentially strong upside for Ford.
After several years of building a significant stake in Rivian and planning to jointly develop a vehicle with the electric car company, Ford officially cut the cord last week, striking out into the EV market on its own. Farley said, "We have growing confidence in our ability to win in the electric space" in an Automotive News interview, Yahoo! Finance reports. Farley said the situation is very different than it was two years ago when the strategic alliance began, noting, "So much has changed: about our ability, about the brand's direction in both cases, and now it's more certain to us what we have to do."
Image source: Ford.
Source Fool.com
