Shares of Rivian Automotive Inc closed 7.3 percent lower on Monday after the electric vehicle maker recalled nearly all of its vehicles.
This incident certainly raises concerns from the investor side, that the company may not be able to meet its 2023 production target.
Rivian’s market cap is said to have fallen by more than $2 billion to $31.1 billion in one day. This amount is very small when compared to other brands such as Ford Motor Co and General Motors Co, which are valued at US$45.67 billion and US$47.08 billion, respectively.
“We have bigger concerns on 2023 production expectations,” said RBC Capital Markets on Monday, October 10 citing Reuters.
Rivian has recalled over 12,000 of its production EVs due to loose ties that caused the driver to lose control of the steering wheel.
The recall includes select R1T 2022 pickup trucks, R1S SUVs, as well as the electric delivery van (EDV) it builds for Amazon. Rivian alone produced a total of 14,317 vehicles in the first three quarters of 2022 and delivered more than 12,000.
However, with the recall of almost all of its products, it ended up affecting almost every vehicle Rivian has produced this year.
On the other hand, Amazon has invested more than 1 billion euros over the next five years in the production of electric vans, trucks and other low-emissions vehicles across Europe.
Amazon has ordered 100,000 shipping cans from Rivian Automotive Inc through 2025.
