(Reuters) - Shares of Rivian Automotive Inc closed 7.3% lower on Monday after the electric-vehicle maker recalled nearly all its vehicles, heightening investor concerns that the company may not be able to meet its 2023 production target.
Rivian's market capitalization dropped more than $2 billion to $31.1 billion in a single day, compared with automakers such as Ford Motor (NYSE:F) Co and General Motors Co (NYSE:GM), which are valued at $45.67 billion and $47.08 billion, respectively.
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 vehicles in the third quarter of last year and has so far delivered 13,198 vehicles.
"We have greater concerns on 2023 production expectations," RBC Capital Markets said on Monday. The addition of battery packs and motors, as well as downtime required at the plant to ramp up capacity could derail Rivian's pace of production, according to the brokerage.
While the broad recall could hurt the brand and cause lingering credibility issues for future production, Wedbush Securities said it does not believe the recall would impact Rivian's production or delivery goals for the year.
Rivian's shares have fallen 67.3% this year, following a cut in production outlook and a selloff in equities driven by an uncertain macro-economic environment.
Wall Street expects Rivian to make 23,590 vehicles this year, according to Visible Alpha.
GRAPHIC: Rivian produced a record number of vehicles in Q3 - https://graphics.reuters.com/RIVIAN-PRODUCTION/zjvqkxnyqvx/chart.png
A local court in Georgia, where Rivian is building its $5-billion manufacturing plant, last week rejected a joint proposal by the state's 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 the company would gain incentives of $1.5 billion from the state.