Rivian shares skid after EV maker recalls nearly all vehicles

Oct. 10 (Reuters) – Shares in Rivian Automotive Inc (RIVN.O) fell about 9% on Monday after the electric carmaker recalled nearly all of its vehicles, fueling investor concerns that the company may not be able to meet its 2023 production target.

Amazon.com Inc Supported (AMZN.O) The company on Friday recalled about 13,000 vehicles because of a possible loose attachment that could cause the driver to lose control of the steering wheel.

Rivian began selling its electric cars in the third quarter of last year and has so far delivered 13,198 vehicles. Read more

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“We have larger concerns regarding 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 factory to increase capacity, could derail Rivian’s production pace, it said.

While the broad recall could hurt the brand and cause ongoing credibility issues for future production, Wedbush Securities said in a note, it does not believe the recall will affect Rivian’s production or delivery targets for the year.

The company’s shares fell to $30.79 in early trading – the lowest in over a month. They are down 67.3% this year due to a sell-off in stocks driven by an uncertain macroeconomic environment and a production cut.

The company in March cut its 2022 production forecast in half to 25,000 due to supply chain issues. Read more

Wall Street expects Rivian to make 23,590 vehicles this year, according to Visible Alpha.

Reuters graphics

A local court in Georgia, where Rivian is building its $5 billion plant, last week rejected a joint proposal from 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 obtain $1.5 billion in incentives from the state.

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Reporting by Akash Sriram and Savyata Mishra in Bengaluru; Editing by Shinjini Ganguli

Our standards: Thomson Reuters Trust Principles.

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