Rivian (RIVN) stock plunged Monday after the startup EV maker announced a recall of nearly all of its vehicles to fix a steering defect. The loss sent Rivian shares to their lowest level since mid-July.
Amazon (AMZN)-backed Rivian recalled almost 13,000 vehicles due to a loose fastener that could cause a driver to lose steering control.
“This is a black eye for Rivian as the company is just now starting to hit its stride on reaching its 25,000 production target for 2022 and has roughly 100,000+ reservations in hand for its EV sport utility vehicles with clear momentum into 2023,” wrote Wedbush analyst Dan Ives in a note to clients Monday.
“The last thing any Rivian investor wants to see in a shaky market is a broad recall that hurts the brand and gives some lingering credibility issues to production going forward,” Ives added.
Recalls are not unusual for automakers. But, as a startup, Rivian is under the microscope. The recall casts doubt on the company’s ability to ramp up production, and is in a “prove me” period, Ives said.
“It’s a speed bump in the Rivian growth story in our opinion; however, another recall or stumble from a production perspective would be a Street worry if another shoe drops,” he said.
Rivian Q3 Deliveries
Earlier this month, Rivian reported it produced 7,363 of its R1T pickup truck and R1S SUVs during the three-month period that ended on Sept. 30. Rivian also said it delivered 6,584 vehicles during the same period.
The automaker is still backing its target of delivering 25,000 vehicles for 2022.
Follow Adelia Cellini Linecker on Twitter @IBD_Adelia.
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