Rivian recalls 500 EV pickups due to front passenger air bag defect

Rivian issued a voluntary recall this week for 500 of its R1T pickup trucks for a sensor defect that could cause air bags to improperly deploy when a child is in the front passenger seat.

Rivian has built 5,000 EVs to date and is on track to produce 25,000 vehicles this year. The startup electric truck manufacturer, which has struggled to keep up with early demand, announced its production progress — and the recall — in its first quarter earnings report Wednesday.

“Rivian has determined that on certain R1T vehicles, the front passenger seat may not deactivate the front passenger air bag as required if a child seat or child is in that seat,” Rivian spokesperson Peebles Squire said in an emailed statement Thursday. “In the event of a crash which deploys the front passenger air bag, a seat with this improper calibration may increase the risk of injury for any child or child seat occupant sitting in the seat.”

The company is notifying customers impacted by the recall and replacing the front passenger seat at no charge.

California-based Rivian launched production in October at a former Mitsubishi plant in Normal, Illinois, where more than 5,200 employees are building thousands of R1T pickups and R1S SUVs, along with two commercial vehicles for Amazon, an early Rivian investor that ordered 100,000 delivery vans.

Rivian, which went public in November, is sitting on $17 billion in cash and has 90,000 orders for its R1 consumer EVs, the company said Wednesday. The company has received about 10,000 R1 preorders since implementing a price increase  March 1, fetching an average of more than $93,000 per vehicle.

But supply chain issues and a slow production ramp-up have hammered Rivian’s stock price this year as it struggles to keep up with demand.

“We are encouraged by the acceleration of our demonstrated production rate,” Rivian CEO and founder RJ Scaringe said during an investor call Wednesday. “These demonstrated production rates, which we expect to continue to increase, coupled with our current supply chain outlook, give us confidence in our ability to hit our targets for 2022.”

The Normal plant has an annual production capacity of 150,000 vehicles. It was positioned to build 50,000 vehicles in 2022, but global supply chain issues, including a semiconductor shortage that has roiled the auto industry, cut the first-year target in half. Rivian produced 2,553 vehicles during the first quarter, with Amazon electric delivery vans accounting for about a third of that total, Scaringe said.

Scaringe said the Normal plant will move to a two-shift operation this year, and that suppliers will be able to keep up with an accelerated production schedule.

“We’ve worked with those suppliers to ramp their production,” Scaringe said. “We have clear line of sight to them being able to keep up with our continued ramp in our facility.”

Construction has begun to expand the 3.3 million-square-foot Normal factory to 4 million square feet by the fourth quarter, which will increase production capacity to 200,000 vehicles per year. Rivian has also signed an agreement to build a second plant near Atlanta where it plans to build a lower-cost EV called R2 beginning in 2025.

When Rivian went public, investors were betting the EV startup would become the Tesla of trucks, pushing its valuation north of $100 billion. But the stock, which hit a high of $179.47 in mid-November, has fallen sharply this year amid the slow ramp-up. Ford, another early Rivian investor, sold 8 million of its 102 million shares Monday after the initial public offering lockup expired, getting $26.80 per share, according to regulatory filings.

The stock closed at a new low Wednesday of $20.60 per share — before the earnings announcement.

Despite the recall, investors appeared somewhat assuaged by the production outlook, with Rivian’s stock closing at $24.30 per share Thursday, a nearly 18% gain.