Ford Motor Company (F), which is one of the early backers of EV startup Rivian Automotive, Inc. (RIVN), is shelving its plan to develop an EV with the latter altogether.

What Happened

As Ford steps on the gas on its EV transition, the Detroit-based automaker has decided to abandon it plans to jointly develop an EV with Rivian, CEO Jim Farley said in an interview with Automotive News. Farley said Ford expects to produce 600,000 vehicles per year by the end of 2023.

When Ford initially invested $500 million in Rivian in 2019, it envisaged developing a Ford branded EV that will come with Rivian's skateboard powertrain. In early 2020, the companies said they are shelving the plans for a Lincoln-branded EV but would go ahead with an alternative vehicle based on Rivian technology.

The Ford CEO suggested in the interview that the company is now increasingly confident in competing in the EV space by itself. Another handicap that forced the going-solo decision was the complexities involved in integrating the hardware and software together.

Why It's Important

Rivian shares debuted on Wall Street on Nov. 10 following an initial public offering at a bumper valuation of over $100 billion. The company's strong debut and the subsequent run up in shares have raised eyebrows over its valuation, which has taken it past the market capitalization of legacy U.S. automakers, including Ford.

Rivian's product pipeline consists of RIT, an EV pickup truck, which it began delivering to customers in September. As of Oct. 30, the company produced 180 R1Ts and delivered 156 R1Ts, with the bulk of them going to the company's employees.

The company noted that at the end of October, it had pre-orders of about 55,400 R1Ts and R1Ss. It expects to fill the pre-order backlog by the end of 2023.

Ford, for its part, has doubled on its EV strategy and invested big dollars into its transition toward EVs. "We respect Rivian and have had extensive exploratory discussions with them, however, both sides have agreed not to pursue any kind of joint vehicle development or platform sharing," Ford said in an emailed statement to media.

Rivian, meanwhile, confirmed that it is a mutual decision to focus on each of their own projects and deliveries, given Ford has scaled its own EV strategy and demand for Rivian vehicles has grown. "Our relationship with Ford is an important part of our journey, and Ford remains an investor and ally on our shared path to an electrified future" a Rivian spokesperson said.

Rivian closed Friday's session up 4.23% at $128.60, while Ford closed down 0.87% at $19.39.