EVs From Rivian, Tesla, And Two Other Brands Are Being Recalled

Manufacturers of electric vehicles may need to conduct a recall on Monday. A number of them have appeared on the website of the National Highway Traffic Safety Administration.

‍

The large players' recalls don't appear to be serious. Smaller EV company recalls appear to be more significant and demonstrate once more how challenging manufacturing EVs is. The stocks are not changing very much. Perhaps investors are accustomed to recalls, which have long been a part of the auto industry.

‍

12,716 cars, including some R1T trucks and R1S SUVs, are being recalled by Rivian Automotive RIVN +2.48% (ticker: RIVN) to address a seat-belt parts problem. The automobiles will need to be fixed in a shop.

‍

Almost 26,000 automobiles have been subject to four recalls by Rivian. Over its history, the company has delivered about 21,000 vehicles. Naturally, recalling a vehicle more than once to address problems is possible.

‍

In Monday's premarket trade, Rivian stock was unchanged. Futures for the Dow Jones Industrial AverageDJIA +0.31% and S&P 500SPX +0.65% were also positive. That either means the issue doesn't sound too serious or that investors are becoming accustomed to recalls.

‍

The price of Tesla's TSLA stock was unchanged in premarket trading as well. The NHTSA website also lists a fresh recall for it. To remedy a seat anchor bolt, Tesla is recalling 3,470 Model Y vehicles.

‍

It's a minor recall for a hardware problem. The majority of Tesla recalls are software-related and don't involve taking cars in for repairs. Through over-the-air software updates, Tesla corrects them.

‍

The bigger EV manufacturers, including Rivian and Tesla, recalls were published on the NHTSA website on Monday. More are available from smaller EV companies.

‍

Because "a problem in the motor controller and inverter or the battery controller may cause the electric motor to shut down and cause a rapid loss of drive power," Electrameccanica Vehicles (SOLO) is recalling 428 units.

‍

That sounds like a bigger deal. Nonetheless, in premarket trade, shares were up approximately 4%. Although having a market valuation of less than $100 million, the company is not widely traded.

‍

19 vehicles are being recalled by Lordstown Motors RIDE -6.25% (RIDE) due to a problem that might also cause a loss of power. NHTSA made the recall announcement on Monday, but the business had already done so on February 23.

‍

In premarket trading, shares of Lordstown increased by approximately 2%. Although the company's fourth-quarter results fell short of Wall Street expectations, its cash balance increased from the third quarter to the fourth thanks to contributions from Foxconn partner Hon Hai Precision Industries (2317.Taiwan).

‍

In the fourth quarter, Lordstown recorded the sales of three vehicles. The business estimated that by delivering nearly 32,000 vehicles in 2022, it would generate $1.7 billion in sales.

‍

It turns out to be far more difficult than expected to make EVs.

‍

Less than $400 million is the combined market value of Lordstown and Electrameccanica. The market value of Rivian is approximately $16 billion, and as of the end of 2022, it had more than $12 billion in cash on hand.

‍

Of course, Tesla is an established company. In 2022, it will generate more than $7 billion in free cash flow, proving its profitability. The market value of Tesla exceeds $600 billion.