Written by Brenda Nakalema

Ford and Rivian Recall Some EVs

Ford Motor (ticker: F) and Rivian Automotive (ticker: RIVN) recalled some EVs recently. Despite the technological leap that EVs have …

Ford Motor (ticker: F) and Rivian Automotive (ticker: RIVN) recalled some EVs recently. Despite the technological leap that EVs have made in an industry that previously made fun of their prospects, they are still cars at the end of the day and, therefore, also experience very car-like issues.

On Monday, a recall notice for 1,175 Ford and Mustang Mach E Vehicles was posted on the National Highway Traffic Safety Administration website, “The right-rear axle half shafts may have been manufactured improperly, allowing the half shaft stem to break under load,” reads NHTSA notice. The companies announced that the parts would be inspected and replaced for free of charge.

Following this news, a new notice was posted for 207 Rivian R1T pickup trucks and R1S SUVs for front seat belt anchors that it seems might have been improperly installed. It was announced that those parts would be replaced for free as well.

To this current date, Ford has issued 52 recalls effecting changes on roughly 7.2 million vehicles. Rivian has experienced two recalls on roughly 680 vehicles.

Other automakers that have also instituted recalls include Tesla, with 13 recalls impacting roughly 2.3 million vehicles. The majority of these were software-related issues. General Motors (ticker: GM) and Chrysler have issued 19 and 25 recalls, respectively. GM’s recalls impacted roughly 2.1 million vehicles and Chrysler 1.3 million. Toyota Motor (ticker: TM) has experienced about 11 recalls, impacting about 700,000 vehicles.

It is estimated that roughly 22 million vehicles have been recalled so far this year. Roughly 35 million vehicles were recalled in 2021.

For automaker investors, this news isn’t as alarming as it might seem to most. Recalls are a regular part of the auto industry. They, therefore, don’t always have a huge impact on stock prices, except in rare instances where the expenses are large enough to create changes that fall outside a company’s normal warranty expense.

Heading into the week, Ford stock dropped 27% year to date. Rivian stock dropped roughly 69% year to date. The S&P 500 and Dow Jones Industrial Average are both off by around 18% and 14%, respectively.

Rising interest rates have investors concerned about a slowing economy and slowing car demand. Rivian investors have also had to deal with a slower than the hoped-for increase in production. At the beginning of the year, Wall Street analysts hoped Rivian would deliver roughly 40,000 vehicles. Rivian will deliver closer to 25,000 in 2022.

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