Rivian shares slide after EV maker recalls nearly all vehicles

Shares of Rivian Automotive Inc fell about 9% on Monday after the electric-vehicle maker recalled nearly all its vehicles, exacerbating investor concerns that the company may be unable to meet its 2023 production target.

The Amazon.com Inc-backed firm on Friday recalled about 13,000 vehicles due to a loose fastener that could cause the driver to lose steering control. Rivian started selling its EVs in the third quarter of last year and delivered 13,198 vehicles.

“We have greater concerns on 2023 production expectations,” RBC Capital Markets said in a note on Monday. The addition of battery packs and motors, as well as downtime required at the plant to ramp up capacity, could derail Rivian’s pace of production, it said.

A Rivian R1T electric truck is seen outside Munro & Associates headquarters in Auburn Hills, Michigan, U.S., June 3, 2022. REUTERS/Rebecca Cook

While the broad recall could hurt the brand and cause lingering credibility issues for future production, Wedbush Securities said that it does not believe the recall would impact Rivian’s production or delivery goals for the year.

Shares of the electric vehicle maker fell to $30.79 in early trading – the lowest in over a month. This year, they have fallen 67.3% due to a selloff in equities driven by an uncertain macroeconomic environment and a production forecast cut.

The company in March cut its 2022 production forecast to 25,000 due to sticky supply-chain issues. According to Visible Alpha, Wall Street expects Rivian to make 23,590 vehicles this year.

Last week, a local court in Georgia, where Rivian is building its $5-billion manufacturing plant, rejected a joint proposal by the state’s Department of Economic Development and the company to secure local incentives for its project in the state. The local development authority had said in May the company would gain incentives of $1.5 billion from the state.