Shares of Rivian Automotive opened sharply lower Monday after the electric vehicle maker said late on Friday that it is recalling over 12,000 vehicles – nearly every EV it has made to date – to double-check that a fastener in the vehicles’ steering assembly was properly tightened.
The stock was down more than 7% shortly after the U.S. markets opened on Monday.
The recall includes every Rivian R1T pickup and R1S SUV made through late September, as well as some of the EDV delivery vans the company produced for Amazon — 12,212 vehicles in all — 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 vehicles 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 fastener 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 – a situation that could lead to a loss of steering control and potentially 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 itself 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 to be expensive, Rivian is “under a bright spotlight” and further quality or production issues could hurt the company’s standing with investors.
“This is a black eye for Rivian,” Ives wrote.
Rivian said that it is aware of seven reports of issues that could be related to the fastener in question. It isn’t aware of any injuries related to the defect.
The repair is simple: Rivian’s service centers will check the fasteners and tighten them if needed. Rivian has notified affected customers and plans to complete the repairs within 30 days.
The cost of the recall is unlikely to dent Rivian’s substantial cash hoard. The company had $15.5 billion on hand as of the end of the second quarter, far more than most rival EV startups.
Rivian’s shares have fallen about 69% since the beginning of the year.