Amazon and Ford Motor Company took massive Q2 2022 losses of $3.9 billion and $2.4 billion, respectively, on their investments in EV startup Rivian Automotive.
For the second straight quarter, the online retail giant recorded a loss on its Rivian holdings during the April-June period, the company said on July 28 in its second-quarter earnings report. The $3.9 billion markdown takes Amazon's paper losses on its Rivian stake to $11.5 billion for the first two quarters of 2022, a period during which the EV startup lost three-quarters of its value.
Overall, Amazon's Rivian stake went from being worth $27 billion in November 2021 shortly after the company's IPO to about $5 billion at the moment. The tech and e-commerce giant holds approximately 18 percent of Rivian's common shares.
Amazon says the markdowns don't impact its operations or cash position and simply reflect the massive fluctuations in the market since late last year.
Gallery: Amazon Electric Delivery Vehicle (Rivian Van)
CNBC reports that the investment could become problematic if Rivian's business gets into trouble or runs low on cash, preventing the company from manufacturing delivery vehicles at the speed it promised Amazon. Rivian committed to delivering 100,000 EDV electric vans to Amazon by 2030, including 10,000 in 2022.
Last week, Amazon announced it is beginning to roll out some of the Electric Delivery Vehicles co-developed with Rivian, expecting to have thousands of electric vans in more than 100 cities by the end of this year.
Ford Motor Company, which holds around 9.7 percent of Rivian's common shares, took a $2.4 billion mark-to-market writedown on its holdings in the second quarter of 2022, also marking its second successive quarter of Rivian stock-related losses; in Q1 2022, Ford's Rivian holdings lost $5.1 billion of their value. The automaker said the Rivian loss was the main reason why it posted a net income of just $667 million for Q2 2022.
In May this year, Ford sold 15 million of its Rivian shares in two successive tranches, reducing its stake in the EV startup from 11.4 percent to 9.7 percent. Amazon has not sold any of its Rivian shares yet.
Rivian's share price has stabilized since late June, closing at $33.84 on July 28. The stock is up about 29 percent since the end of June.
