Rivian's quick response to recall shows value of direct-to-consumer model, CEO says

Rivian Automotive faced a major challenge when it discovered that nearly all of its electric R1T pickups, R1S SUVs and electric delivery vans must be physically inspected for a possible loose steering fastener.

Immediately after the early October recall, Rivian's stock price fell sharply, adding another demerit for an EV startup already struggling with shortages and missed delivery targets since launching production last year.

The recall affects about 12,200 of the nearly 13,200 vehicles delivered through September of this year, according to data from Rivian and NHTSA, the federal safety agency.

But after recent volatility, Rivian's stock price and its reputation are on the mend.

The company's shares closed 10 percent higher on Tuesday, to $34.49, nearly matching their pre-recall price. The shares are still down 66 percent year-to-date due to continuing production challenges and a broader market selloff.

CEO RJ Scaringe said the company has earned some goodwill from customers who witnessed a nimble, in-house service operation that could also lean on its mobile service fleet for quick checks of the fasteners.

"This is something where we identified a potential issue [and] we wanted to get out as early as possible," Scaringe said in an interview at TechCrunch Disrupt last week in San Francisco.

"We made a decision on a Friday afternoon [Oct. 7] to make this move, and by Friday evening repairs were underway," he added. "And we worked through a significant majority of the vehicles in the next 10 days."

The actual fix, the Rivian founder said, only takes a few minutes to ensure a bolt is properly fastened.

No accidents were reported to NHTSA, which describes the problem as: "A loose steering knuckle fastener could separate, causing a loss of vehicle control and increasing the risk of crash."

Two previous Rivian recalls — for an improperly secured seat-belt anchor and an airbag issue — affected fewer than 700 vehicles combined.

Scaringe said the automaker was able to move quickly when the fastener issue arose thanks to a sales and service model that doesn't rely on franchised dealers.

"For us, one of the most powerful things was having our direct-to-consumer model, where instead of having to go through third parties or dealers or different entities, we literally mobilized our whole service network to say 'Let's go move through these vehicles really quickly,'" Scaringe said at the event.

He acknowledged that customers are rightfully frustrated by the recall. But Rivian showed "that we were trying to do the best possible job we could," Scaringe said. "We didn't sugarcoat it. We said we're going to fix this."

On Rivian online forums, vehicle owners are generally praising the quick service — whether through mobile units sent to their homes or at Rivian service centers. There are some complaints of mobile service getting rescheduled or failing to show up.

Edmunds published an update of its long-term R1T owner experience on Monday, saying that the recall was done through mobile service that took about 5 minutes.

Edmunds is not that pleased with a series of Rivian service notices about other potential issues — but has high praise for the R1T overall.

"The list of things that might have issues include a misrouted wiring harness under the front cowl, a loose rear suspension toe link bolt, water collection in the rocker panels from heavy rain or stream fording, and window moldings that could become detached," Edmunds wrote as part of its 5,000-mile review.