Amazon-backed Rivian sinks in recall of almost all of its electric trucks

Amazon-backed Rivian sinks in recall of almost all of its electric trucks

Shares of Amazon-backed electric truck maker Rivian fell more than 7% to a three-month low on Monday after announcing the recall of nearly all of its vehicles due to a defect.

The California-based company is recalling about 12,200 vehicles due to a loose nut, according to a filing Rivian filed with the National Highway Traffic Safety Administration.

Rivian has manufactured approximately 13,000 trucks since production began in late 2021. The defect, which it estimates is present in 1% of vehicles, could lead to noise and vibration and, in the most extreme cases, cause the engine to be lost. steering control to the driver.

The company is one of America’s most prominent electric vehicle start-ups. A 2019 deal with Amazon to supply 100,000 electric trucks helped underpin Rivian’s initial public offering in 2021. But it has suffered setbacks this year. Amazon, now its second largest shareholder, agreed to buy trucks from a rival, and Rivian raised preorder prices in March while cutting production targets in half.

Rivian said that as of September 28, he discovered seven vehicles affected by the loose nut. The fix “takes just a few minutes,” and the company expects to complete the recall in 30 days.

“The safety of our customers will always be our top priority,” Rivian said in a statement. “To date, we are not aware of any injuries resulting from this issue.”

While recalls are common in the auto industry, this is the second in a month by an electric vehicle start, after Arizona-based Nikola recalled all 93 trucks it built due to an improperly installed seat belt. Rivian’s recall is a setback at a time when consumer demand for electric vehicles is on the rise.

“The last thing a Rivian investor wants to see in a volatile market is a brand-damaging blanket recall,” said Wedbush analyst Dan Ives. “Rivian is in the spotlight for the streets and in ‘prove me’ mode for RJ [Scaringe, chief executive] and his team, with this latest news, a slight setback that the company must overcome.

Rivian said a week ago that it remained on track to meet its reduced production target of 25,000 trucks for the year.

Shares of the company fell 11.2% in morning trade on Monday, but recovered ground to close down 7.3% to a three-month low of $31.48. Rivian has a market capitalization of nearly $30 billion, about a third of the valuation it achieved when it went public in November.

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