"With the announcement of a new plant in Georgia made earlier this month, and a deal with Volkswagen several months ago, it looked like Rivian Automotive Inc. ( NASDAQ: RIVN), which has lost billions of dollars and will probably lose billions more, was on the road to a better future. However, the National Highway Traffic Safety Administration reported it had begun a preliminary investigation into 17,198 Rivian electric delivery vans over seat belt flaw concerns."
"Rivian offered good news recently as it said it would open a plant in Georgia at a cost of $4 billion. It will use the facility to build its R2 SUV and R3 crossover. Both will be priced well below its R1T and R1S, which carry base prices over $79,000 and can hit $100,000. Additionally, while the deal with Volkswagen is for over $5 million, the final payout may not hit that level."
"'According to the NHTSA's Office of Defects Investigation (ODI), six complaints from vehicle owners described cables that frayed, broke or unraveled, leaving drivers at risk of being unrestrained in a crash or sudden stop,' USA Today reported. The term 'risk' stands out as worrisome. While Rivian can afford a recall, even of over 17,000 vehicles, the announcement will hurt its rebounding image."
NHTSA began a preliminary investigation into 17,198 Rivian electric delivery vans over seat-belt cable flaws after owner complaints of fraying, breaking or unraveling that could leave drivers unrestrained in crashes or sudden stops. Rivian produced 5,979 vehicles in the most recent quarter and has incurred billions in losses. Rivian plans a $4 billion Georgia plant to build lower-priced R2 and R3 models and has a deal with Volkswagen that may pay over $5 million but could underdeliver. A recall is financially feasible but will harm Rivian's rebounding image amid delivery challenges and strong competition from lower-priced EVs.
Read at 24/7 Wall St.
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