October 12, 2022: -On Monday, the shares of Rivian Automotive are set to extend sharply after the electric vehicle maker said that it is recalling more than 12,000 vehicles, almost every EV it has made, to double-check that a fastener in the vehicles’ steering assembly was tightened correctly.
Rivian’s shares were decreased around 6% in premarket trading on Monday.
The recall includes every Rivian R1T pickup and R1S SUV made through late September and some of the EDV delivery vans the company produced for Amazon though the company estimates that only about 1% of those have the defect.
Through the end of September, Rivian had built about 15,300 vehicles since starting production in the fall of 2021. The company had set a goal to reach 25,000 autos produced by the end of the year.
The defect involves a fastener in the front suspension that may not have been tightened fully in some vehicles. If the pin isn’t tight, Rivian said, it could affect the alignment of the front wheels, potentially causing vibrations and noise and changing the feel of the steering.
In rare instances, Rivian said, the fastener could come completely loose, leading to a loss of control and a crash.
Nearly all automakers have recalls from time to time. But the numbers involved in Rivian’s and the potential consequences if a fastener works completely loose have investors concerned.
Wedbush analyst Dan Ives, who follows Rivian closely, said in a Monday morning note that while auto recalls are routine and this one isn’t likely expensive, Rivian is “under a bright spotlight.” Other quality or production issues could hurt the company’s standing with investors. “This is a black eye for Rivian,” Ives reported.
Rivian said it is aware of seven reports of issues related to the fastener in question. It isn’t aware of the injuries related to the defect.
The repair is simple; Rivian’s service centers will check the fasteners and tighten them if needed. Rivian has advised affected customers and plans to complete the repairs within 30 days.
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