EV recall costs Tesla challenger shares to drop sharply amid production concerns

Tesla's key rival in US is in trouble over EV recalls. Rivian, which aims to challenge Tesla's dominance in home market, saw its shares drop drastically after issuing a recall of around 13,000 electric vehicles it has delivered till date. The shares of Rivian had dropped by more than seven per cent on Monday, which is worth almost $2 billion (roughly converted to ₹1,64,83 crore). Investors are now concerned that the electric vehicle manufacturer may not be able to meet its production targets for the next year amid the recall.

According to news agency Reuters, Rivian's market capitalisation dropped below $30 billion in a single day. The share price of the EV maker has fallen by more than 65 per cent this year. The EV manufacturer, which has the backing of Jeff Bozos' Amazon, had recalled about 13,000 vehicles due to a possible loose fastener which the carmaker termed as ‘minor structural defect’. The issue could have led to the driver to lose control of the steering wheel.

The recall is one of the biggest in the EV industry considering the Rivian had just hinted to take off as a major player in the US with 13,198 vehicles delivered since it began operations. The recall includes almost every single unit the company has sold so far. This pegs back the EV maker's future production targets too amid backlog to clear the recalled units. The EV maker has a rough production capacity of nearly 23,000 vehicles every year.

Rivian is one of the latest electric carmaker to emerge in the US market. It aims to take on Tesla, world's largest electric vehicle manufacturer with its lineup of battery-electric R1T pickup and R1S sport utility vehicles. It also has a deal with Amazon, one of its biggest shareholders, to build 100,000 EV delivery vans by the end of this decade.