Rivian Announces Recall of 12,000 Electric Vehicles, Stock Plummets Over 7%

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] U.S. electric vehicle startup Rivian saw its stock price plunge more than 7% on the 10th (local time) after announcing a voluntary recall of over 12,000 vehicles.

According to CNBC and other outlets, Rivian's stock closed at $31.48 on the New York Stock Exchange, down 7.28% from the previous trading day. The stock price fell more than 10% during the session but narrowed the losses toward the end of trading.

In a letter sent to customers on the 7th, Rivian stated, "A problem has been found where certain steering system components in some vehicles may not have been sufficiently tightened," adding, "We are conducting an urgent recall for this reason." The voluntary recall covers 12,212 vehicles, including electric pickups, vans, and sport utility vehicles (SUVs).

The company explained that seven cases suspected to be related to this issue have been reported, but no injuries have been reported so far. However, if there is abnormal noise or vibration from the front of the vehicle, immediate repair is necessary, and customers will not incur any costs, the company added.

Since starting production in the third quarter of last year, Rivian has produced about 15,300 electric vehicles by the end of September and delivered 13,198 of them. Rivian has set a goal to produce 25,000 vehicles by the end of this year.

This recall is the third for Rivian this year. Market experts have mixed views on the impact this will have on Rivian's production.

RBC Capital Markets expressed "greater concerns about Rivian's production forecast for 2023," stating, "Downtime required to expand factory capacity to add battery packs and motors could slow Rivian's production pace." Wedbush Securities said that while the extensive recall could damage the brand and affect future production, it does not expect it to significantly impact Rivian's overall production and delivery targets.

This content was produced with the assistance of AI translation services.