The Rivian stock experienced a decline of 8.5% following the announcement by Rivian Automotive Inc. (NASDAQ:RIVN), an electric car manufacturer, that the company will recall around 13,000 vehicles already delivered to customers due to a minor structural problem. The Rivian stock price fell at 9:37 a.m. on Monday in New York, extending a slump that had already caused it to lose two-thirds of its value in the early trading days of this year.
Rivian Stock on Recall Expense
Rivian, situated in Irvine, California, is doing the recall because a fastener “may not have been appropriately torqued,” as stated in a letter to customers written by Chief Executive Officer RJ Scaringe and reviewed by Bloomberg News. He said that in “very unusual conditions,” the nut might get completely free. On October 7th, an article was published in Bloomberg News regarding the recall.
“Out of an excess of caution,” the firm has decided to recall practically all of the cars it has given to consumers, despite the problem being found in only seven of those vehicles. Rivian has said that it does not know of any injuries caused by the problem. A knowledgeable person about the topic states that the recall expense won’t make a significant difference.
The recall is a blow for Rivian, which has only recently overcome manufacturing issues and component shortages to deliver its electric vehicles to clients in considerable amounts. The recall is a setback for Rivian stock. The corporation was also forced to cope with the aftermath of an embarrassing U-turn in March when they decided to boost the cost of pre-orders.
Free Adjustments
Consumers can choose between the battery-electric R1T pickup truck and the R1S sport utility vehicle that Rivian manufactures. In addition, it has an agreement with Amazon.com Inc., one of its most significant stockholders, to produce one hundred thousand electric vehicle delivery vans by the end of this decade.
A spokesman for Rivian stated that the company is “committed to correcting this problem on all impacted vehicles as swiftly as possible.” “The safety of our clients will always be our first concern,” the spokesperson said. We will make any necessary modifications at no additional cost at our service facilities.
In the letter, Scaringe stated that by tightening the fastener to a more considerable torque tolerance, most customers would be able to get their vehicles serviced in a matter of minutes. There is a possibility that some of the cars may require their parts to be replaced.
Rivian was considered the most promising new electric vehicle (EV) startup to compete with the market leader Tesla Inc. after the company completed a massive initial public offering (IPO) in November and received support from prominent Wall Street investors and strategic investors such as Ford Motor Co. However, difficulties with manufacturing resulted in a decline in the company’s share price so far in 2018, although the company has reaffirmed its intention to construct 25,000 electric vehicles in 2018. This has helped to mitigate losses.
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Author Marianna Vilchez 
