Rivian parts skid after the electric car manufacturer recalled almost all vehicles

Oct 10 (Reuters) – Shares in Rivian Automotive Inc ( RIVN.O ) closed 7.3% lower on Monday after the electric car maker recalled nearly all of its vehicles, raising investor concerns that the company may not be able to reach the production target for 2023. .

Rivian̵[ads1]7;s market value fell more than $2 billion to $31.1 billion in a single day, compared with automakers such as Ford Motor Co ( FN ) and General Motors Co ( GM.N ), which are valued at $45.67 billion and 47.08 billion dollars.

Amazon-backed Rivian on Friday recalled about 13,000 vehicles due to a possible loose fastener that could cause the driver to lose steering control.

The company started selling electric cars in the third quarter of last year and has so far delivered 13,198 vehicles. read more

“We have greater concerns about production expectations for 2023,” RBC Capital Markets said on Monday. The addition of battery packs and motors, as well as downtime required at the plant to increase capacity, could derail Rivian’s production rate, according to the brokerage.

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

Rivian’s shares have fallen 67.3% this year, following a cut in its production outlook and a share sell-off fueled by an uncertain macroeconomic environment.

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

A local court in Georgia, where Rivian is building its $5 billion manufacturing plant, last week rejected a joint proposal by the state 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 that the company would receive incentives of 1.5 billion dollars from the state.

Reporting by Akash Sriram and Savyata Mishra in Bengaluru; Additional reporting by Yuvraj Malik; Editing by Shinjini Ganguli and Shounak Dasgupta

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