What happened

Ford Motor (F -0.25%) began its path toward investing in electric vehicles (EVs) before many of its announcements on the Mach-E or F-150 Lightning. Way back in April 2019, Ford made a $500 million investment into EV start-up Rivian Automotive (RIVN -0.25%). That relationship has come into more of a focus in recent days after Rivian went public and now sports a market cap well above that of Ford. That same relationship is what pushed shares of Ford up sharply today. Its stock closed Monday's session up 5.4%, though it jumped as much as 7.2% earlier today. 

So what

The bounce came after both companies acknowledged that they have scrapped previous plans to jointly develop an electric vehicle. That news gave investors confidence that Ford's electrification strategy is strong enough to proceed on its own. 

Ford F-150 Lightning at Ford's Rouge EV center.

Ford F-150 Lightning at Ford's Rouge EV center. Image source: Ford Motor.

Now what

Ford spokesman Ian Thibodeau confirmed the companies scrapped vehicle development plans, but he said that Ford retains a relationship with Rivian, as reported by CNBC. Part of that relationship stems from the 12% stake that Ford now holds in Rivian after the start-up went public through an initial public offering (IPO) less than two weeks ago. 

As Ford has detailed more of its EV transition plans, perhaps it shouldn't have been a surprise to investors to hear the shift in previous plans to work directly with Rivian to deliver a Ford EV. Last month, Reuters reported that Ford executive Alexandra Ford English had left the Rivian board in May. That news came from filings by Rivian related to its IPO. 

But with the companies now acknowledging the change from previous plans to work together, investors seem more confident that Ford is comfortable enough with its go-to-market strategy surrounding electrification that it doesn't need to work with a pure play like Rivian. That's good news for those looking at the long term with an investment in Ford, and its 12% Rivian stake also gives Ford access to new capital, which provides additional options for the automaker.