Why did Rivian recall all vehicles? Customers advised to contact electric vehicle company amid suspension issues

American electric automaker Rivian recalled more than 12,000 units of their product for a possible steering defect. This affected the EV start-up's shares (RIVN.O) and closed 7.3% lower on October 10, 2022. The company may not be able to meet its production targets for 2023.

The EV company recalled 12,212 vehicles, which accounted for all of their products made to date, to double-check if a fastener in the vehicle's steering integrant was properly tightened. This includes all R1T pickups and R1S SUVs made through September, as well as some of the delivery vans produced for Amazon.

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Rivian stock prices plummet after vehicle recall

According to Reuters, Rivian's market capitalization dropped more than $2 billion in just one day, falling to $31.1 billion, whereas comparative automakers such as Ford Motors Co (F.N) values in at $45.67 billion and General Motors Co (GM.N), at $47.08 billion.

The Californian-based company began selling its models during the third quarter of last year. They managed the sales of a little over 13,000 units, only to have to rescind about 94% of the products.

Customers have been notified after seven reports of the issue were filed. No injuries have been reported. The issue is said to be a potential faulty fastener connecting the steering knuckle and the front upper control arm may not be "sufficiently torqued."

Rivian CEO RJ Scaringe said in a letter to customers that they need to exercise caution should they face any issues. He said:

"It's important not to minimize the potential risks involved and why we are volunteering to conduct this recall."

Though the company is recalling over 12,000 vehicles, the chances are only 1% of said vehicles are faulty.

CEO of Rivian RJ Scaringe (image via Getty Images)

This is not the first time the electric vehicle company has been in such hot waters. In May of this year, the Amazon-backed automaker recalled 500 units of their R1T pickups because their airbags may not have been deactivated if there was a child in the front passenger seat. Front passenger seats generally come equipped with sensors that deactivate the airbag if the seat is empty or there's a child in the seat.

Rivian Motor's R1T pickup (image via ET Auto)

This year alone, the company's stock prices have dropped 67%, currently valuing in at $31.48, following a selloff of equities motivated by an unpredictable macroeconomic environment.

Although the broad recall could hurt the brand and damage its future production reputation, wealth management and capital market company Wedbush Securities does not believe this action could hurt the company's end-of-year goals in terms of production or delivery.

The company is headquartered in Irvine, California, but manufactures in Normal, Illinois. They have the capacity to inspect all vehicles and are offering all the necessary repairs within 30 days. Should a customer's vehicle need to be held longer for further inspection, loaner vehicles will be provided. They also plan to set up pop-up service centers in areas with a high density of owners.