Rivian Automotive, Inc. shares plummeted Monday morning following news that the manufacturer is recalling 13,000 of its electric vehicles (EV) to fix an issue concerning possibly loose fasteners in the car’s front suspension.
The EV manufacturer’s share price fell by almost 10% in early morning trading in response to the recall, which covered the vast majority of the total 14,317 EVs it has sold.
The recall includes all of Rivian’s R1T pickups and R1S SUVs produced through September and some of the electric delivery vans produced for Amazon, according to the company.
Rivian is “under a bright spotlight” right now, said Wedbush analyst Dan Ives. Although auto recalls are routine, and Rivian’s recall is not likely to be as expensive as others, he said it is still a “black eye” for the company.
The fasteners in question may not have been “sufficiently torqued,” a company spokesperson said.
A fastener is “a hardware device that mechanically joins or affixes two or more objects together.” In Rivian’s case, the relevant fasteners are supposed to connect the front upper control arm and the steering knuckle.
According to the company, a loose fastener can lead to alignment issues for the vehicle’s front wheels, which can cause unwanted vibration and noise. In rare cases, the fasteners could come entirely loose and result in a complete loss of steering, said Chief Executive RJ Scaringe in a letter to customers.
“It’s important not to minimize the potential risks involved and why we are volunteering to conduct this recall,” Scaringe said.
The company said that the recall would be handled through Rivian’s service centers with initial plans to complete repairs within 30 days.
If mechanics are alerted to a loose fastener in a customer vehicle, a tightening process will occur to ensure the hardware is torqued correctly.
Rivian had its IPO in November of 2021, opening trading at $78, eventually skyrocketing to an all-time high of $179.47.
Today, shares of the company are trading slightly above $30, an 83.2% fall in share value from its watermark high and a drop of roughly 61% since it became a publicly traded company.